Travel + Leisure Co. (TNL) Earnings Call Transcript & Summary

Hello. Good morning, everyone. My name is Anthony Powell, and I'm the hotel analyst here at Barclays. Today, we have Michael Brown, CEO; and Mike Hug, CFO, of Wyndham Destinations. Welcome, gentlemen.

It's great to be here. Thanks for having us.

No problem.

Thank you.

So first, we'll pass it off to Michael, who's going to give a brief introduction about the company, and then we'll go to Q&A or I'll lead off with questions and then hopefully get some questions from the audience. So Michael, on to you.

It's great to be with everyone today. Real briefly, Wyndham Destinations is the world's largest vacation ownership and vacation exchange business. In 2019, we did nearly $4 billion of revenue and about $3 million short of $1 billion of the EBITDA. So obviously, hospitality sector, we've been affected by the events of COVID. But one of the questions about our industry has always been about the resiliency and strength in a downturn. Needless to say, we didn't expect a downturn like this. But in our first full quarter of operations, we posted really strong Q3 results, again, showing the resiliency of our business. We never stopped paying our dividend in the course of 2020, we think. We're very proud to continue to return capital to shareholders, backed by the strength of our free cash flow model. As we move into 2021, like all, we're excited about a return to leisure travel, that we expect to return very strongly. We've seen very early signs when we reopened our resorts in Memorial Day of this year that the leisure traveler was the first to return on the drive-to basis. And that strength has continued even in the most recent spike of infections in November. We did a press release this morning along with a new investor deck, which shares a lot of that information, but I'm sure we're going to get into it here with Anthony.

Yes. On that note, so you did mention that your third quarter was pretty strong. And relative to other areas of lodging, I think it was surprisingly strong. Just give us essentially why you think that was and why the customer was so resilient relative to other types of customers that we've seen in the travel and leisure industry.

Yes, it's been a common concern of the overall industry that in financial crises or downturns, that timeshare is not a salt product and therefore, a high-ticket item, it won't be -- continue to perform. But after 9/11, after the great financial crisis and now after COVID, this industry has proven that the leisure traveler is strong. They love a product that there's space and I think this crisis has really played to the benefits of owning timeshare, is you have your own kitchen, you have your own bedroom, your living space. People can spread out. And in our specific case, we have 700,000 of our 880,000 owners who have completely purchased their timeshare, meaning their consumer finance is paid off. And therefore, when they feel comfortable traveling, they simply needed to get in their car and drive to the resort with no incremental cost. And leisure travel has always been the first to return. This crisis has been no different. And the type of product that we offered and the type of ownership we offered has really made it, I'm not going to say cost free, but an easy decision to get back on the road when you felt comfortable health and safety wise.

Got it. And you mentioned that Wyndham is the largest player in the timeshare business. I think -- what else differentiates you in terms of your customer segment or your addressable market that helped you kind of recover during the third quarter?

Well, I think size and scale has made a big difference for us. We have 230 resorts worldwide, which means most of that is North America. And in our case, there -- you could get to about -- 95% of our owners could get to a resort within a 300-mile drive. So we saw a pretty dramatic turn of events where traditionally, 72% of our arrivals were by car. And that jumped at 92% over the summer and into September and October. So the drive-to nature of our resorts was a real advantage to us of getting people back on vacation. I think also the industry has dramatically changed. It used to be that branded -- great branded companies like Disney, Marriott, Hilton, Wyndham, Holiday Inn only represented about 30% to 35% of the industry. Today, that number is about 75%. And for us, specifically, we're a middle market, sort of an everyday traveler type of clientele. And we uniquely have that space. Without a ton of competition, quite candidly, our average household is $100,000 annually. And because we serve that drive-to market, that type of customer that's looking for value, it was easy for people to get back on vacation with us once we reopened.

Could you go into some of the steps that you took in the second quarter to fortify the business and to reduce cost? And what percent of those cost savings could be permanent going forward?

Yes. We took the point of view -- and just going back a little bit, we became a public company in June of '18. So we had already begun some consolidation of becoming our own independent company and taking out some duplicative costs when we were part of a larger organization. But we made the decision very early that we wanted to fortify our balance sheet. Mike can talk about what we did as related to our debt. But organizationally, we felt that this was going to dig deep and last longer than most expected. So we were proactive and took cost out quite early. We believe that over $60 million to $70 million of that cost takeout will be permanent without affecting business. And really, the way we did it is, obviously, we adjusted for short-term volume loss. But I think more importantly is, culturally, we made a shift that we didn't want to be trying to maintain so many different projects. We took the top 5 really and said, "This is what we're going to dedicate our time and financial resources to." And pretty much every single one of them is customer-centric. So we took -- we prioritized our capital projects, and we also began to reduce our capital spend on new projects. And both of those have led to both permanent operating savings of over $60 million to $70 million. And then you're going to see capital outlay for inventory to decline from what we traditionally do of $250 million to under $200 million in the years going forward. Mike, do you just want to just speak to the debt side?

Sure. And on the balance sheet side, rate execution on a corporate transaction of $650 million back in July of this year basically fortified our balance sheet. Even with that, we expect to be free cash flow positive this year. And Michael, in his opening statements mentioned that we continue to pay a dividend even during the pandemic and that's because we believe in the free cash flow model that we have. As I mentioned, we will be free cash flow positive this year. One thing I think that people were curious about in this industry is will the ABS markets still be open to us. We generate receivables and take those receivables to the ABS markets to term and in cash. And we executed 2 great transactions, 1 in March and then another 1 in August. So I think this pandemic has given us that opportunity to demonstrate not only the resiliency of the model as it relates to our owners traveling and continued VOI sales, but just as importantly, the recurring revenues that we have in the interest on the portfolio, the management fees that we get and then access to the capital markets, which allow us to have a very strong balance sheet. Our leverage is about 4x levered at the end of September. So very comfortable with where we are from a liquidity standpoint. And that long-term confidence in our free cash flow allows us to continue to keep paying that dividend to our shareholders.

You mentioned that you weren't seeing a huge impact from rising COVID cases on trends. And you obviously released a press release and a new investor deck today. And maybe going to a bit more on that. What are you seeing now? And anything you want to highlight when your recent disclosures will be held?

Well, obviously, the concern is anytime that infections go from 35,000 in September or October to now nearly 200,000, we knew the question was going to be, "Mike and Michael, you said in July and August that your correlated cancellations will correlate to infections. And here we are almost 3x infections than what we saw in July and August." But what you'll see on Slide 4 of our investor deck is although cancellations to reservations have increased, they've increased very modestly, not near to what they returned -- not near to what they were in August. And in fact, they look a lot more like what they had leveled out at in September. Why that's the case, I think that's a question of psychology, but it seems that the consumer has gotten comfortable living in this COVID world. Yes, some people have decided that they're going to wait for their vacations. But again, it's been very clear that in the month of November, our cancellations have not spiked to what they were in August. They've increased, but very modestly. I think the tie on to that is while there is very short term and modest impact to arrivals to our resorts, we are, at the same time, seeing the other side of the coin, which is increased demand for sort of that March and onwards of 2021, a desire of people to go ahead and lock in travel, presumably anticipating better times and more clarity as to COVID in 2021.

Got it. And you're not seeing any new restrictions on your ability to serve customers, right, in any of your major markets due to lockdowns or anything like that?

Actually, the answer to that is yes, but it's very regionalized. It was either yesterday or the day before. As an example, Hawaii just imposed a 14-day quarantine restriction. We have virtually no business in Hawaii, so it doesn't directly impact us, but there are new restrictions that are coming into place. There are some occupancy restrictions coming into place in Vegas, cities like San Francisco. So we're reacting to that. But I think the counterpoint to that, Anthony, is that we saw cases spike to 200,000. And really, it was consistent in the last 3 weeks of November, yet we posted -- in our press release, we've mentioned approximately $85 million of sales, and that now puts us at $195 million of sales of vacation ownership sales for the quarter. That's less than a 50% decline from last year. And in the midst of all of this, to think that we're continually able to produce at that level and the only real impact being the arrivals component. And again, as I mentioned modestly, as dark of a new cycle as the month of November was as it relates to COVID, I think that sales number really speaks to the strength not only of our business, but the desire of the leisure traveler to return to some level of travel normalcy.

Switching gears a bit, I guess, to inventory sourcing. You talked a little bit about CapEx spending and whatnot. What are the main ways that you source your inventory for VOI sales? And how do you expect that to trend over the next couple of years?

So when we went into the crisis, we were spending about $250 million of inventory per year, and we had on hand nearly 2 years of inventory. With the reduction of sales, that time horizon has lengthened, and therefore, our thinking around inventory acquisition has changed as well. Our desire would be to preserve capital in the process of this pandemic. And obviously, after the fact, and we're not going to needlessly go out and buy inventory given that our balance sheet is in an extremely strong position. Yes, we'll evaluate it, but Mike and I's anticipation is we'll be reducing that $250 million number to under $200 million, not just for the immediate future, but more than likely for a few years, which gets us back to what we think has been a core selling point of our Wyndham Destination story is we've been very disciplined about returning capital to shareholders. It's why we were persistent in maintaining our dividend, and we're -- indicates our desire to get back to a more normalized form of returning capital to shareholders as soon as that cash flow is available. Look, they had our resorts shut down and our affiliate resorts on the RCI shut down for 2 months. And to be in a position on December 1st, 11, 12 through this year to say that we're going to be cash flow positive this year, we feel really good about that story and know that 2021 has got a lot of positivity ahead of us.

You have a lot of exposure to many of the major timeshare markets like Las Vegas, Florida, Gulf Coast, California, some in Hawaii. Are there any markets where you want more exposure going forward?

I think we're in a great place where we are. And the diversification that we've built over the years has allowed us to withstand this crisis very well. Yes, we have exposure to Vegas, it's 13%. Yes, we have exposure to Orlando, it's 12%. But in the grand scheme of things, I think we would all agree those markets will return. We're seeing Orlando return faster than others, but we're not overly dependent on any particular resort. Where would we like to see growth? We do see more trends in the urban destinations. If you look at the resorts that we signed and delivered pre-COVID: Austin, Texas; Portland, Oregon; Nashville, Tennessee; we just announced Atlanta, Georgia, we're super excited about that on the Centennial Park. So urban exposure in the middle of COVID probably doesn't sound the best, but we think that that's where the travel trends are going. We're also very proud of our international business. We only have about 10% exposure internationally. Most of that's in the South Pacific, and we'd like to see more activity up in the Asian market, specifically Japan and China. And so I'd say that's where we would be looking to grow, but we don't think that there is a hidden gem out there that we're missing and that we desperately need to fulfill our portfolio.

Understood. Moving on to sales. You talked a lot about your strength in open market sales in your presentations. Can you go into what exactly that is, and why is that an advantage for you relative to your competitors?

Yes. I think it's a common story in this industry that the 2 -- if you're a branded company, your 2 primary sources of sales are either owner sales or your loyalty database from your sister hotel company. And if you're unbranded or you're an independent developer, it's your owners and your open market channels. The reality of Wyndham Destinations is Wyndham Destinations began as an independent company called Fairfield, acquired Trendwest, and therefore, did not have the hotel affiliation as a nascent timeshare company. Over the years, we developed the scale associated with an independent timeshare company to the point that we were able to develop about $800 million of sales. In order to be successful in that space, you need scale. And Wyndham uniquely has that level of scale like no one else, enter Wyndham Hotels and a Wyndham Hotel loyalty base that is relatively untapped. Three years ago, it represented about $10 million of sales, and we were on track to project over $100 million in 2020 until COVID hit. We think that has several $100 million of opportunities. So we get the best of both worlds. We have the owner business, which everyone has. We're growing and early in the stages of our hotel relationship and we've got a long history of success and scale in the open market. And the result of that has led Wyndham to be the largest timeshare seller and which has knock-on benefits to our portfolio, our management fees and so on and so forth.

So on the hotel relationship with Blue Thread and Wyndham Hotels that -- you said it got up to $100 million or is forecasted for that this year. Was that -- has that grown faster or slower than you thought? And what do you think it would take -- would need to -- what do you think it takes to get that to the level you want over time? Is it just more growth over Wyndham Hotel's loyalty members? Is it better coordination? What's kind of the playbook there?

Yes. So it's a great question. First of all, I would say, post-COVID, the story is intact to pre-COVID as well. I see no barriers to getting to our original projections of where we thought the Blue Thread could get to. Why do we want to get there? Because the VPG is roughly $300 higher than it is in open market, and that leads to better margins and better profitability. So knowing that we can grow that is a super positive component of our growth story. Why do I think it's special? First of all, the hotel relationship is fantastic. The team over at Wyndham Hotels does a phenomenal job, very cooperative. It's a win-win relationship with both. I think what's unique about the Wyndham relationship is that when you look at the portfolio of brands that Wyndham Hotel has, our resorts fit in a space that's not occupied by one of their brands. So when you go to their hotel website, you see our properties and people say, "Well, that's actually what I'm looking for." So it's complementary to their brand portfolio. And we pick up a lot of rental opportunities from that website, which is a really strong part of the Blue Thread relationship. And many of those people, who've self-selected to go vacation in a unit with a kitchen or a studio or a 1-bedroom with a kitchen and its own bedroom, is a natural client for us because they've already said that's how they like the vacation, and we can trade the value of ownership. But a lot of good work done with the hotel group and see no reason that we can't get back to our original projections.

Understood. And in terms of new owners. The new owner mix was at 28% in the third quarter this year, down from 38% last year. It was not surprising given COVID. How do you plan on engaging prospective new owners once the environment normalizes next year?

Exactly. 28% was more than we expected in the third quarter. So we were very pleased with that result. We thought it would be 20% to 25%. We've taken the opportunity when COVID hit to not only change the cost component of our business, but also we felt that we had an opportunity to relook at our marketing. And we've raised our FICOs from 600 to 640 for marketing qualifications because we knew that that would have downstream positive impacts to our provision, which we saw in quarter 3 with provision as low as it's been in my tenure here with the company. And that change will ultimately change our long-term outlook for new owners. But we will want to get back in over 30% in the near term. Whether we get there in 2021, it's probably unlikely because we have to ramp up a lot of that open market channel again. But our objective is definitely to get back into the mid-30s in the pretty near future. Next year will be the transition year, though.

Okay. Sort of a broader question. So the industry overall reached about $11 billion in sales in 2007, declined during the financial crisis. Eventually got back to $10.5 billion by 2019. We'll see a decline this year, obviously. Do you think that we can get back to over $11 billion and sort of growing the industry kind of on an absolute basis over time? Or do things like Airbnb and whatnot kind of prevent -- present a cap against the industry growth over time?

No, I absolutely think we can get back there. And I think there's a few dynamics to understand about the last decade of timeshare. And the first is that that $11 billion included an entire market of what was known as fractionals at the time where there were a lot of companies in there selling $0.25 million, $300,000, $400,000 timeshare of bundled weeks, months at a time. And that industry has all but gone away. So you have to keep in mind that that $11 million included that in it. But as we've grown back, there's been a fundamental transition to our industry is that -- what I mentioned earlier, that the branded companies now represent 2/3 or more of the sales that are occurring now. So what you're seeing is stronger balance sheets coming into the space, companies that are devoutly tied to the reputation management and doing right for the customer, the idea of flexibility with the tie-in to the loyalty programs. And ultimately, I think the last decade, where people -- we've got some work to do to continue to tell our story about it being a fixed week, same week, same unit, same time of the year in the same location, that industry is long gone. With the companies that are now the primary players, it's maximum flexibility, points as a currency, go where you want, when you want in the type of unit that suits you. And ultimately, that's been the primary driver in the midst of consolidation back to where we are at roughly $10 million. So I don't think there's constraints from outside the industry or inside the industry to continue to grow it beyond where it is today.

Understood. I guess moving on to -- speaking of credit. You mentioned that you cut out the very low end of the FICO score curve this year, but going by more broadly, your FICO scores have increased from 691 in 2008, to I think 738 last quarter. Yes, that's benefited loan loss provisions, but has that had any impact on VOI sales? And how do you view that -- those levers as you seek to grow the business over time?

Why don't I let Mike mention the history?

Yes.

Go ahead, Mike.

Yes. So I think to your opinion, obviously, the last process we had was truly a credit process, and therefore, as you noted, we slowly increased our FICO each year to make sure that we were attracting the appropriate level of consumer, give us a good portfolio that we could take to the ABS markets consistently 3 times a year and generate cash. And we're basically doing the same thing now. As we reopen our sales offices, we've moved our minimum FICO up to 640. And for the near future, we'll probably leave it in at 630 to 640 range. But the benefit very clearly came through in the third quarter where we saw the provision come in at 18.8% when, historically, over the last couple of years had been north of 20%. So when you look at our overall portfolio, there's about 5% that's under that 640 level. So not a significant impact to sales, and the impact to sales are more than offset by the good quality portfolio, which brings that provision under 20%. And as I mentioned, allows us to continue to access the ABS markets, which we've done, as I mentioned earlier, even during the downturn. Our last transaction being in August, where we were able to upsize and get a 90% advance rate. So a slight hit to sales over the longer term, but the benefit is more than paid for in terms of the provision reduction and good quality free cash flow from the ABS markets.

Right. You mentioned your ABS demand was very strong. I'm guessing that resulted in a pretty good coupon. How do you balance the coupon on an ABS versus the rate you charge to customers, and how that spread evolved recently?

Yes. You're right. I mean the demand for the last transaction in August, we went to market with a $400 million transaction, upsized it to $575 million, and we're able to get the interest rate down to about 2.8%. Even with the low interest rates that we see in the ABS markets, we're able to charge the consumers a rate that's just under 15%. And the reason for that is it's a fairly small monthly payment, it's about $350 monthly payment. We're providing financing at the sales table to the consumer while they're on vacation. So the convenience of that financing is really what's attractive to them. And whether you're charging 14% or 11%, it's not really a huge monthly payment or impact on the monthly payment. The other thing, too, we would point to is if a consumer isn't paying for their accommodations through their timeshare, they're probably going on vacation, staying in a hotel room and putting it on their credit card. And the credit card rates are, as we all know, well in excess of 15%. So -- plus you get home from your vacation and you got that $3,000 bill facing you for your accommodations. With timeshare, you're paying that monthly. So when you take that vacation, really, the only incremental cost you have is the park tickets or whatever you spend while you're on vacation. So that's where the economy comes from for the consumer, is paying for those accommodations on a monthly basis. And if you want to compare interest rates, really, the proper way to compare it to would be that credit card that you would be putting it all.

And over the past few years, there's been a lot of attention on the tie-ins or exit companies who are claiming that they could get people out of these loans at various costs. Could you go into how that issue has evolved in recent years and your efforts to combat these practices?

Yes. Happy to do so. And it has evolved tremendously because there was generally the -- a lot of advertising out there that said, call us and we will get you out of your timeshare. Let me just share a little bit of context with you. We have 880,000 owners, 700,000 of them don't have a loan with us so they can go on vacation for their -- the annual price of their maintenance fee. And the retention rate on them is 98%. So the reality of the situation is although there's been a lot of noise in the marketplace, our consumers have been very loyal to wanting to vacation with us. Did it impact us? Yes, it raised our provision, and we're seeing that come down. And the reason I think we -- it is coming down is we laid out a very clear, 5-point plan that started with being customer-centric and maximizing everyone's vacation. That's the most important. That's what we're in business to do. But the other side of that spectrum is we've litigated very heavily against these companies that are making false claims and misinformation and have a long, long, long string of successes because the vast majority of people who we've brought a case against have chosen to stop doing business as opposed to answer for their actions in court. We don't deny that there are times that people should exit their ownership. Life changes, but we'd encourage them to seek out either a reputable provider, which there are some out there or call us. And we do it without a fee, and most of those exit companies just end up calling us and going the same route as if they just called us and we can do it without a fee. So that's how it's evolved. Ultimately, there's always this type of thing that happens in any industry. And our #1 objective has to remain customer satisfaction and make sure that out in the marketplace that people are just getting honest information. And if that's the case, then there's really no issue with people wanting to exit their ownership.

Just a reminder to the audience. If you have any questions, feel free to e-mail me. My e-mail should be on your screen, so feel free to reach out. Moving on to the Exchange business, rebranded as Panorama recently. How important is that to your overall value proposition both to investors and to your consumers?

We think it's quite important. We love this business. It's always been a great business for us. It represented historically about 30% of our EBITDA with virtually no capital investment and highly, highly predictable cash flows and EBITDA. So the business and the story we love, it had a relatively low growth component, 0% to 2%. And Anthony, you said at the very beginning, what's your addressable market? The mission of our company is to put the world on vacation. And it's not the timeshare world, it's the world. So we -- in the North America, there's 130 million households and RCI services 4 million of them. So there's a lot of addressable leisure traveler households out there that we feel that we can address, not just in the timeshare space, but also outside. And we've got the platform and the technology to do it. And that's why we wanted to rebrand and refocus that business. We're not going away from our core business. We love that business, but we want the investor community to see that it's not only the Wyndham Vacation Club side of the business that has a growth component to it. We want to share that growth story across the whole of our business, especially the 30% that is really -- its economic profile looks a lot more like a hotel from a cash flow and EBITDA stream than it does a timeshare company. So if we add a growth component, you start to get more balanced growth and therefore, a different perspective on maybe how to value our business.

Right. So just to be clear, the Wyndham Club is one part, and now this newer part is more like hotel business. So how is that growing? And exactly how are you engaging customers on that side of the Panorama?

Yes. So 70% of our EBITDA today is the sale of Wyndham Vacation Ownership. Wyndham brand selling the Wyndham product, and that generates about 70% of our EBITDA. The traditional RCI before it was rebranded, which is 30% of our EBITDA, provides exchange services for the entire industry to move between the different brands. That business isn't changing. We're simply saying that due to our relationships with travel providers, and the technology that we acquired last year through the acquisition of a company called ARN, we can now start to provide travel clubs, discounted travel, affiliations outside of the timeshare industry to add a growth component to that side of the business. We just announced our first deal just to put it into something more practical with a great hospitality company called Posadas Group out of Mexico. They're also in timeshare, but they also have an entire hotel business that they wanted to provide a travel club to some of their affinity members. And we're B2B, we're not B2C. And we simply provide the backbone to their travel club that they're going to offer to their clients, therefore, growing our member base and also growing the transaction stream associated with that relationship.

Got it. All right. A question from the audience. Retention of 98% among owners without a loan, what's that number among the $180,000 you have financing? And how do you expect your 870,000 ownership to evolve going forward? Will that grow, strengthen or stay the same?

So our total retention is 96%. I'd have to do the quick math there. On an annual basis, about 30,000 owners rotate out. So those are the dynamics I'd have to do some quick math on, on what the retention -- exact retention rate is for the new owners. We add about 40,000 new owners annually. And the key as we go forward -- obviously, this creates a little bit of an air pocket for about 12 to 18 months on the level of new owner generation. But we were on the path and what we had invested in the last 3 years was to be growing our new owner base about 40,000 a year. And that's why we were targeting that number you mentioned, Anthony, of about 37% new owners because they become our future owner upgrades. And for those of you who don't know the statistic, for every $1 that someone purchases as a new owner over the course of their lifetime with us, they will spend another $2.60 on incremental purchases. So it's very important for us to stay generating that 40,000 at least a year because all we're doing is laying the groundwork for very predictable revenues in the future.

Got it. I guess one cash flow balance sheet capital and return question for me. Historically, you were known or the Wyndham companies are known as a share repurchasing story. You bought back a lot of stock, but this time, you chose to maintain the dividend. Why the focus on the dividend during this downturn? And how do you expect your capital returns priorities to evolve over the next few years?

Yes. Well, I think that the reason we decided to continue to pay a dividend is because we believe in the long-term free cash flow model we have. We definitely believe that the dip in free cash flow in 2020 was a temporary phenomenon, and we want to demonstrate to our shareholders, both current and future shareholders, our commitment to return capital to shareholders. And like most companies, we did have to go in and amend our corporate revolver covenants in the middle of the year. And in doing that, we were able to retain a dividend payment. And I think that's probably an exception when you look across most of the hospitality leisure space and consumer discretionary. So we're in a great spot from a liquidity standpoint with over $1.5 billion in liquidity. Our goal would be to continue to increase our EBITDA throughout 2021, get our leverage rate back down to have a clear line of sight to getting that below 3x levered and then look at additional share repurchases in the absence of any other use of the capital.

Okay. Makes sense. I think we're almost out of time. So any additional comments or closing remarks you wanted to make?

Well, I'll just add, I'll just come back to where we are currently, is we're very pleased with our November results. It's been a tough news month in a lot of respects as it relates to health and safety. And to be able to post sales at least of $85 million for the month, which is really showing continued strength in our fundamental business, is a great sign. As we look forward into 2021, I think that health and safety is going to dictate what happens in the next 60 to 90 days. But as we look forward beyond that, we are starting to see positive signs of forward bookings, both for our vacation ownership business as well as our RCI Exchange business as well as our Rental business. And I think that speaks to the fact that the leisure traveler is ready to get back on the road and at the first signs of an all-clear sign, you can define all-clear. People are wanting to get back on the road and either use their ownership or use the resorts. And I think ultimately, having made it through 2020, being able to reaffirm guidance on December 1 that we're going to be free cash flow positive puts us, I think, in a really great position as we head into 2021.

Great, great. On that note, Michael, Mike, thanks a lot for your time today. We appreciate it.

Anthony, thanks for your time and thanks to Barclays.

No problem. Right.

Bye-bye.

Bye.