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

Good morning, everyone, and it's a pleasure to welcome Michael Brown, CEO of Travel & Leisure Co. As a reminder, I'm sure if you've been in any of the charts yesterday or today, you can type in and ask questions via our pigeonhole website either on the QR code or the link is in the -- is in your booklets as well. And I'll do my best to ask Michael any of those questions.

So thank you for coming, Michael. I thought as an intro, perhaps that anyone new to the company, can you sort of outline the company in its current form? How it came to be? And sort of the major segments within your business?

Yes. Happy to do it, and good morning. Good morning, everyone. So in June of 2018, Wyndham Worldwide separated to Wyndham Hotels & Resorts and at the time, Wyndham Destinations, which is the company that we became in June of 2018. At that point, we were a fully dedicated timeshare today. And if you roll forward to '19, we were doing about $1 billion of EBITDA, of which was split between 2 primary segments. The first was the development, marketing and sale of timeshare, and that was about 70% of our total EBITDA. And the second half was a timeshare exchange business called RCI, which again, about 30% of the industry, and they were the capital-light facilitator of exchanges between Wyndham brand in Hilton and Marriott and Disney, et cetera, the timeshare industry of moving from one property to another. And at that point, as we entered COVID, that was our core business. And in the process of COVID, we had aspirations of fundamentally growing the capabilities of our business and increasing our growth rate. And in doing so, what we did is we went out and we purchased the Travel & Leisure name, it's content, it's magazine and rebranded our company to travel so that we would be able to do 2 primary strategic objectives, the first of which is we wanted to open the possibility to do more in the timeshare space, not just in the Wyndham name but more adding growth opportunities. And then secondly is because we had been fully dedicated to a single brand in the timeshare space, we wanted to open the possibility to serving the leisure travel outside of timeshare. And that rebranding has allowed us to do -- pursue both of those strategic objectives without compromising at all the core business that brought us in 2020 doing about $1 billion of EBITDA.

Great. And so we can go into detail on these segments in the conversation. But as that sort of justification of moving the earnings of the company beyond simply just timeshare and with its brands. How do you think you've delivered on those objectives so far? And how do you sort of look at the key strategic objectives in the next sort of 3 to 5 years?

Well, I would say just over a year beyond the acquisition coming out of COVID, I'm extremely pleased with the progress we've made that the reasons we did the acquisition are the successes we're seeing 18 months on, and we can get into that, but I probably want to reroute ourselves in this strategic moves was all about, in effect, doubling our growth rate. We were and most would consider us a mid-single digits growth company. And this move will allow us to move to a high single digits in effect, doubling our growth rate. That was the first objective from an economic standpoint. And in doing so, what we are seeing coming out of COVID is those 2 core businesses of our vacation ownership with Wyndham and our timeshare exchange businesses are performing as they historically have done. We're committed to their growth rates. We're committed to those 2 businesses because that is the foundation that will allow us to layer an incremental growth. The new businesses, so we call those the 2 Cornerstone brands. Then this new business line, which is travel subscription has a few subsegments underneath it, but it is around providing travel clubs to non-time share owners, and we have made great progress on that front. And I am more confident today on the success of those businesses than I was when we purchased Travel & Leisure. And when we did at Investor Day last September, that really roots us in our 2022 to 2025 objectives. We're not only seeing ideas come to us, but we're now starting to see the economic benefit of that new business that we've launched into outside of timeshare.

Sure. Let's start off with those core businesses. And a few questions about the U.S. consumer and about the health of those markets. I mean, what are you seeing on the ground at the moment in terms of traveling, in terms of any sort of forward demand indicators, do you have any sense that we're anywhere close to peak travel bookings, some of the bigger travel names have seem to be suggesting in April? Or do you see sort of continued strength?

So every day we look and I can say even through yesterday, unequivocally the leisure travel demand has not shown any cracks whatsoever of diminishing. And this is heading into our peak travel season. Just to give you some indicators, our arrivals are back to 2019 levels. Some slight regional variations, but we are back at 2019 levels on arrivals. What's interesting, though, is the consumers changed a little bit in that because they haven't traveled in 2021, their length of stay has increased by about 10%. So occupancies will be up, arrivals will be back to '19. And because of the nature of our product, we think it is distinguishable from a lot of the other hospitality companies is 80% of our owners have fully paid for their vacation. So they are not impacted by the inflation issues that are out there because it's sunk costs for them. They've paid for their ownership. So they are, in effect, every time that a hotel or a vacation rental home or any type of a combination raises their rate, the value that's reflected in the ownership of our product increases by that amount. And so our forward bookings are back to '19 level in Q2 and Q3, and we're seeing that as well in Q4, length of stay is longer. And the traditional memorial to the Labor Day, we think is going to be an extremely robust period for us.

On that -- the flip side of that value proposition is a lot of travel companies are benefiting from the sort of famed pent-up demand that's out there? I mean do you -- how do you best participate in that pent-up demand if pricing is something that's sort of locked in further in the past?

So the locked-in price benefits all those people who committed to this type of ownership in the past. And I get 80% of our -- that represents 80%. So every time one of our owners comes there, come to our resort, the value of -- the validation of the decision they made 1 to 10 years ago, 20 years ago, is that much stronger. And the nature of our business is that someone who's purchased $1 today will end up spending $2.60 in the future. So the fact that the hotel rates are going up today, we benefit because what we're seeing is we're seeing higher purchase rates, and we're roughly 200 to 300 basis points up on our close rates for sales. So we are benefiting from that. Beyond price increases, we're benefiting it because more people are purchasing every time that we come to -- that guests come to our resorts. The equivalent to hotels, everyone knows RevPAR in our industry, it's volume per guest. So for every guest that gets a sales presentation, our volume per guest has moved from roughly $2,400 pre-pandemic to -- at the end of the first quarter, we were at $3,300 volume per guest. So the dramatic increase is playing through to the economics of our business.

And how does that impact how you manage the -- any cost inflation in terms of managing those properties?

So I often use this little saying is every time a hospitality company, their rates go up, they pass that cost to their consumer. Every time our costs go up, we pass value to our consumer. And the reason I can say that is -- from our side, most of our costs are already locked in. We have openly said that we have very minimal development in the pipeline. So we don't feel that we have any exposure to cost of goods inflation for the product for the next 2 to 3 years because our development pipeline is, in effect, shutted off because during COVID, we already have spent the money on our balance sheet. The operations of our resorts are the cost of the HOAs, which is borne by the owners. So they benefit by having a company of our scale running the resorts and keeping costs down. But we aren't exposed to that cost because our management fee is simply a cost-plus basis. So really, when you look at cost exposure, we have a little bit on our sales and marketing costs because we run our own sales and marketing, but it is very minimally relative to what you hear in the other consumer-based products is we don't -- I'm not concerned in the next 3 to 6 months about margin pressures to the extent that what we're hearing from the other consumer-type products.

Sure. I mean, let's talk about the typical Wyndham Destination own a -- how financed they tend to be? Who is the sort of addressable market? What is the typical owner of a Wyndham timeshare?

Sure. Well, our typical customer has a household income of about $100,000. And I think as you look at the demographics of the U.S., it really sits at the largest segment of your leisure traveler. Yes, there is a more upscale market, sort of that 125 to 150. It's a smaller market. But average age of our new purchaser is going to be -- is now under 50 years of age and about 70% of our purchasers are either millennials or Gen Xers, which is a statistic that probably if you were to ask us 5 years ago would have been 35%, 40%. And why that's the case is as the millennials move into that lower 40s age bracket, purchased a home, they have kids. They do not want to put their vacation at risk. I know when I show up with my wife and 2 kids, I don't want to be nervous about the accommodation I'm getting and the amenities that I'm going to experience. And what you're seeing is that type of consumer is saying, "I want to trust a brand. I want to know my amenities and I don't want to maybe look at a picture and that it's not quite expected." So it really is natural that we're seeing that consumer in the 40s want bigger accommodation, which is reflective of, I think, where hospitality stays are going and all the move has been where we've always been, and we're really encouraged by that macro trend of more space in travel.

And does that change in mix sort of do those customers have slightly different demands about what the destinations tend to look like? Has that meant that there's any more renovations or changes to the way that those properties look that are necessary?

Right. So yes. And I think if you were to walk around this conference and say, describe for me timeshare, they would say, okay, you're going to go to one location you're going to go for a week, you're going to go in the same unit that you went last year and it's going to be a 2-bedroom or 1 room. Everything is sort of like it was the year before. The last decade, hospitality companies, Wyndham leading the way, but also Marriott and Hilton, Disney and Holiday Inn, they've all moved to a far more flexible product. So you want to from New York, go to Orlando and take your family for a vacation because the flights are just too expensive, we're going to drive. Why you would do that? I don't know. But yes, you're going to do that. Now you can stop in D.C. for 2 days, stay in a 1 bedroom, see this Missoni Inn, then head down to our new product in Atlanta -- downtown Atlanta, maybe meet some family and get 2 rooms for your points and then go down to Orlando and spend a week in a 2-bedroom or a 1 bedroom of 3. The flexibility of how you use it, the type of studios, the location and candidly, with the hotel loyalty program, maybe you want to -- we don't have a resort on I-95 and you want to stay at Days Inn or Super 8, you can change your ownership to the point. So the flexibility and the brands now representing between 75% and 80% of the overall industry has fundamentally changed how this industry is as opposed to the perception that was brought in, in 2008, 2009 at the great financial crisis.

Sure. And in terms of market positioning, Wyndham Destinations has been a little bit more mainstream than Hilton or a Marriott. How do you feel about that position. Interestingly, Wyndham hotels started trying to move a little bit more upscale, adding some more inclusive brands? How do you feel about the market position of your brands at the moment?

So I love the market position that we are. I think we're very aligned to the hotel group. What you've tended to find throughout this industry and it's proven over the last decade is if someone owns a timeshare at Wyndham, they're going to use the Wyndham Hotels more. And that is -- there used to be this fear that there was not going to be cross loyalty, but I think every hotel brand would say the cross is really there. But I love our position because that's where the core mainstream U.S. traveler is. They're looking for value. They're looking for properties. They're looking for aspirational travel, and we offer all that. With that said, that doesn't prevent us from filling a lot more white space that is out for us. And I think that as part of our rebranding and repositioning, it allows us to stay committed to grow what we have today because it's highly successful. But now we have a much more open field of play that we can leverage to really ensure that we hit that double-digit or doubling of the growth rate that we -- that is our aspiration.

Sure. We've got a couple of questions come in about sort of downside risk. So I think it's probably a good time to ask these. I mean, firstly, how does the business perform through a recession?

Yes. So if I were to say other than describe your perception of time there, which we just went through. The other big misperception of this industry is how does it behave in a recession. People view the purchase of a 20,000 to 25,000 timeshare as a discretionary item. And the reality is, is every customer sentiment survey says, once you get beyond my economic security, my health security. The third thing that's most important is my personal time and my vacation time. People will not give that up in good times and especially in recessions. In COVID, the timeshare industry was the first to recover. Ourselves, we never eliminated our dividend. During COVID, when everyone was pulling down their revolvers, we pulled down our revolver for safety, but we were so secure in our cash flow generation, which is roughly 55% to 60% of EBITDA. We continue to pay our dividends. Our resorts were shut for 2 months, and we're already back to 2019 levels. So the downside risk, you've heard me say we're not developing anymore. We've got our inventory. People will continue to travel in a recession, maybe less. But if you're traveling during the recession, you've proven that you have the financial capability to do so. So you're going to continue to take a timeshare tour. Your volume per guest might go down some, but it's going to be minimal. And I think ultimately, and it's one of the reasons we continue to come out and share the story is when you're looking at the beta associated with this industry and especially us through both the great financial crisis, through COVID, the downside risk is very minimally, and I think the management team at Travel & Leisure has made sure that if there's a recession, we're not only in a position to weather it and really hold our plus 20% margins but we actually think we're in a great position to continue to accelerate the growth of our business along with our Investor Day model.

Sure. And then on how can we best frame the impact of rising rates on the business? Are there any sort of rules of thumb about 100 basis point rise in financing costs on new owner sales and so -- any sort of other parts of the KPIs that we can think about?

Absolutely. So -- and our CFO, Mike Hug is in the room, so he can correct me if I don't get it exactly right here. But first of all, 89% of our debt is fixed. So the exposure to rising rates, we access the ABS market. And every deal that we've done until today has already been fixed. And we typically go to the ABS market 2 to 3 a year. And if we've been going 3. And if there's a real issue, we do have a conduit that we can hold our paper in for a period of time until we feel rates stabilize. Our corporate debt, as I mentioned, is more or less fully fixed. However, the rising rates can impact, I think it's for every 100 basis points, it affects us by roughly $5 million a year, -- is it 100 or 50 basis points?

50.

For every 50 basis points, it's $4 million of EBITDA impact on a guidance of $865 million. And our opportunity to offset that is roughly for every $15 of volume per guest, it's -- it can offset that amount. So in a rising inflationary interest rate environment, the sales proposition of our product increases and therefore, you would expect our volume per guest to increase and offset that. And what we have seen through quarter 1, continuing through the end of May is very strong VPGs and to be more specific, historically high volume per guest.

Great. And then a couple of other questions on timeshare. A lot of the hotel groups have seen benefits on conversion activity. Is that something that your business can take advantage of as well with properties, either hotels closing, other destination properties closing that you can sort of convert and add in without needing a new build pipeline.

So the answer is yes, and then no -- the yes portion is, yes, we can absolutely take advantage of that, and that's exactly what we did coming out of the great financial crisis. And the great -- the rate benefit of the financial crisis for the development of this industry is private equity, regional developers started to see the development opportunity there and have come very strongly in. So development pipelines have never been better in the industry than they are today. However, because COVID hit and our sales went down in 2021, and we had already committed pipeline, we are not in the development business today, which should be good news for everyone because we typically would spend about $250 million a year new projects. And we've laid out very clearly that, that number will be around $150 million, which is an incremental level of cash flow that can be either returned to shareholders or used for reinvestment in the business.

Sure. And then on sort of competition competing for share of wallet, I mean how do you think about the step change in Airbnb in private rentals market share. Most of the hotel groups are looking to grow more and all inclusive. They have big loyalty schemes and sort of higher buying Apple Leisure now as a sort of pay upfront subscription type business in UVC. How do you see the competition for traveler's wallet.

Well, let me start macro and then get into that specifically. You almost could not have scripted the evolution of the leisure travel market more perfectly to where we already were. The Airbnbs, the Vrbos, Vacasas, Timeshare, what you mentioned on Hyatt, UVC, Apple Leisure, et cetera, it's all heading toward the business that we are in. Where we were not and where those opportunities do exist and what I love about what's happening in the entire leisure travel space is not only were we already there, but we were not in the space of outside the timeshare industry. So that is you're sort of leaning into where we saw as well the opportunity is, we have all this experience -- we've been in the sharing economy for nearly 50 years. We run an exchange business that has 3.5 million members already. Why are we not involved in more of the leisure space, which is why, again, we've sort of rebranded. We've launched these travel clubs. People ask me all the time about the other travel clubs that are being launched, and my feeling is this is great. This is the -- putting 6 gas stations on in a 1 mile. It's where the leisure travel is going. And we want to be there. And the expectations that we laid out in our Investor Day, don't overly rely on our success in this space. It's just we want to launch the business. We want them to be subtly successful. And if we do that, very achievable objectives, we're doubling our growth rate. So we love it. We think we're distinguishing ourselves. We have some competitive advantages in those spaces, but we love where leisure travel is going and we're just happy to be part of that evolution.

Great. Let's come on to the exchange business, the RCI business. I mean, firstly, can you just sort of explain a little bit about the economics of how the business works? And I guess, particularly what keeps demand coming from both sides of the network to use the exchange?

Yes. So the exchange business and just to reroute everyone, that was the 30% of our EBITDA and a business we've run for many, many years and has 3.5 million members. If you want to think of it very simply, it's a low-growth business today that has virtually no capital investment and is just very high recurring revenue and recurring cash generation. The way they make their money is simple and keep what I'm about to say in mind for what I'm going to tag it on to is they have an upfront subscription fee to be part of RCI and then a piece of every transaction, sounds very similar to the new travel clubs that we just launched an upfront subscription and a piece of every transaction. But where that demand keeps going is the industry as it develops new owners as other companies sell new owners and maybe their network is 5 resorts or 15 resorts or 25, and they want to offer their customers vacations all over the world. The RCI, the exchange business gives them access to thousands of resorts. So every time someone signs up, whether it's from Wyndham or another company into this exchange network, the developer company is giving their consumers access to a worldwide system of resorts and the benefit for us is obviously those subscriptions and transactions. Where we're evolving that business is that back to your share of wallet comment is we've always been an exchange company of get a subscription in exchange. Well, with the launch of our travel clubs, we're getting more and more benefits associated with your membership in the RCI and getting -- trying to get more of that share of wallet.

The timeshare business is much more established in the U.S. And I think there's some regulatory reasons for that. What sort of properties, what sort of offers does the exchange have internationally that potentially are quite different to where you can travel to in the U.S.

Right. So just to route you in our business, 90% of our timeshare, that's 70% of our EBITDA is U.S.-centric because it's highly regulated, which we love, consumer protection and hospitality brands that everyone knows and the loyalty programs associated with it. I spent 10 years in Europe working in the timeshare industry. The regulation is far more fragmented, very difficult just because you -- all our brands need to make sure that the consumers are protected. The Latin market in Mexico and the Caribbean specifically is in a good place and potentially Asia. But over the course of the last 30 years, there has been a worldwide network created in the RCI exchange system allows their consumers access to thousands of resorts around the world. So the fact that there's not a lot of development activity today in other regions in the world, is it really impacting the fact that the variety has already been established in Europe, Asia, African Continent and Latin America?

Sure. And then on the sort of the B2B side of that business. We've seen Expedia showcasing their sort of B2B products as a way to via sort of white labeling. I think you're doing some of that in the exchange business. So I mean, can you talk about the opportunities and the potential growth on that side?

Yes. So we definitely welcome that announcement. So just a slide to distinguish it slightly is our exchange business is that 30%, we're going to continue to run that. Incrementally, a few years ago, we bought a travel platform and have begun to customize it so that we could offer that same travel club through a white labeling B2B. So we've been at that for about 18 months now. We've seen incredible traction. We've contracted with a lot of names that you would know, the National Association of Realtor, NFL Alumni Association, Mastercard in Eastern Europe, so on and so forth. And so we've begun that effort. And I think although there's a lot of similarities to what Expedia just launched, and I'm still learning all the details because it's a very recent announcement. It's great because again, it's coming -- it's validating where we are going. And -- but where we are positioning ourselves is with size comes an inability to really customize and I'm not sure what they're going to do. But for us, one of the biggest benefits that we've seen in dealing with the associations and organizations that have contracted with us, which is about 20 at this stage is our ability to customize and make it unique to them. And again, we're not trying to be the biggest player in the space, but we want to be the most customer-centric customizable, and we've seen that, that's been a big decision point for a lot of companies as they've chosen us to be their travel partner.

Sure. And sort of just taking a step back, do you think that a higher proportion of travel bookings generally will go up the funnel as it were in the sort of the Mastercard type site or a lot of websites are now trying to offer hotel bookings, travel bookings, timeshare bookings? And is that something that you think is going to be a longer trend?

Well, probably so. I mean it's -- you just have to look at the sort of the typical banking sheet of look at all these new companies, of which half will succeed or if we're lucky. But the point to that sheet is that's where people are going. So I think the natural answer is yes. And to me, you have to figure out what you own in that space and some of the things that we want to own very clearly as we -- it's a closed user group, you have to get behind the paywall and be part of that. It's not about advertising, certain brands or -- it's about being part of a closed user group, and it's also from our product offering being customizable and making sure that it delivers to that specific name that we're working with. It's not a one-size-fits-all.

Great. And then let's come on to the newer businesses, the sort of Travel + Leisure, subscription-type business. What's the addressable market here? And I think it's sort of related, what is the crossover in customer type with the core business?

So we've sized the total travel market in the U.S. of 95 million to 100 million households. And I think the typical presentation is for people to get up here and say, well, we can get all 100 million of them. And I think that sounds good, but I -- more realistically, the timeshare market is about 10 million households. And it's been consistently that, but it's consolidated and share of wallet has shifted between companies. And I think that could grow, and I believe that it will continue to grow beyond 10 million. But out of 90 million households, there's clear opportunity to address a market that may want a shorter duration, may want a lower entry price point, may want especially with Travel & Leisure is ease of use and content that I can trust. And what do I mean by that? When someone writes an article in the Travel & Leisure magazine and describes their trip to Milan and the restaurants they went to, the hotel they stayed in, instead of going to 6 different websites and booking all 6 of those, wouldn't it be nice to trust you as the writers article to experience that exact same trip in a single site. So it's trusted and curated content along with value that comes with it, addressing a market that's beyond the 10 million. And we size that market to be probably 35 million to 40 million, and we've put as our sort of 2025 goal to be a membership of somewhere between 0.5 million to just over 1 million. So the aspirations are not overly aggressive to get to a doubling of our growth rate and early indications are we're feeling really good about the acceptance of that product.

And what are your thoughts on, I guess, sort of travel subscriptions and subscription fatigue. Subscriptions generally ballooned during the pandemic and then we've seen signs that that's starting to roll off, people less willing to so much upfront for 30 different products across all different sort of consumer types, what are your thoughts on sort of subscriptions generally?

So we don't feel like we were chasing a trend. We purchased Travel & Leisure during COVID, not because there was a subscription trend because we had a macro strategy. And ultimately, the subscription businesses that provide you, and I think we all just need to think about ourselves if you're canceling a subscription just because you're not using it. I use my Netflix and my HBO, and I don't have a Peloton of people who want to use their Peloton are still using it. So travel, we know people want it. We know whether it was during COVID, where people just decided not to cancel their trips as much as just said, I'm going to drive to our destinations as what we saw. If the subscription product has value to a segmented group of consumers, they won't cancel it. It's just like the timeshare is if you're getting value of your ownership, it's one of the reasons that for people who fully own their timeshare, there's only a 2% churn every year. So it's -- to me, it's fundamentally about providing a product that people want.

Sure. And how does customer acquisition differ in the sort of Travel & Leisure products versus the more core part of your business?

Absolutely. It's -- yes, I would say it's a continuum. Timeshare has always been a direct sales and marketing business, which candidly has given it the perception pre-great financial crisis that was maybe not the best perception, but with the bringing on a brands and the real customer focus, you've seen a dramatic change in where that industry has gone and the customer perception and customer satisfaction. But that's a direct sales and marketing business. As you move into subscription with lower entry points, lower duration, you still need that direct acquisition entry point of launching a product because there's not word of mouth. There's not brand awareness. But it gives you the opportunity as time goes on to move down the continuum from purely direct acquisition into more passive acquisition, which lowers customer acquisition costs. What I would say to you today that after 6 months of having that we launched at last September is we've had a lot of learnings. And what we're seeing is our -- we're comfortable with our customer acquisition cost. We're satisfied with the number of customers that are now coming into our business. And now we have to see how that plays out because subscription business is often not necessarily about the upfront, but the retention once you get beyond, say, your first year of membership?

Sure. Just one of the questions that is coming from the audience is how can we compare the Travel & Leisure subscription with TripAdvisor Plus or the eDreams Plus, eDreams Prime product?

So I think on a general basis, you can put them in the same category where we are seeking to own a different space is that curated and expert content that comes from the writers of the magazine. It doesn't mean that you can't go outside those curated content. We have over 600,000 hotels in this space. But number 1 is the customized and curated content by an expert travel -- travel expert. And then secondly, even though it's very important, is there's also the benefits of that closed user group travel value. So those 2 elements are there, which I mean, TripAdvisor can speak to their own product, but it doesn't have that tie in directly to that travel expert in that curated content. But I think they will be successful, and I think we will both be successful in this category.

Sure, sure. One of the other questions was which I think is quite an interesting one, has expanding into these new verticals and doing more M&A, made the business more complex to manage?

Not at all. It is a great question. But part of our calculus pre-COVID was, we're already in this space. We've been an exchange business and a travel provider for over 40 years. We've just -- we have self-defined ourselves as a single brand in a single industry. And we have all the capabilities to be more than that. So it's been an exciting time because all that expertise that we had in-house, complemented by expertise we've bought from outside the industry. My biggest fear has always been, do not take your eye off the ball because our cornerstone businesses are incredibly resilient, low risk, mid-single digits growth and don't lose sight of that. And because it's so closely adjacent to where we already were, really, the amount of work is really about the technology platform that we purchased just building that and expanding that to be more robust. And that's been really the only incremental complication. And the team has performed phenomenally well, better than I expected to get us to already having, as I mentioned, over 20 contracts on our B2B side and growing member base on the B2C side.

And have you disclosed the subscriber numbers on the B2C side? That was another question that I gave there.

We haven't yet. We will eventually. But what we're trying to do is make sure we get launched and get very clearly laid out. We've been disclosing because we launched it first, is the number of contracts that we've signed on the B2B side, which -- and then secondarily, then we'll get into all the metrics. We did lay out our objectives in the 2025 -- in the Investor Day, where we wanted to be in 2025 on our member basis. And as I've indicated here is I feel very good about how we've progressed in the first 9 months on working toward those objectives.

Great. I want to sort of finish with a couple of questions about Airbnb.

Sure.

They've introduced recently split stays across multiple rentals. This idea that you can, at the same time, book multiple different properties as part of the same trip. Is that something that you would be interesting to your user base? Is that something that you would look at doing? Is there any sort of thoughts that you have on that product?

So in all fairness, I'm not going to pretend to be an expert on Airbnb and comment too much about their business. But that is the nature of our product. And that is sort of the misperception I was talking about that as Wyndham and other hospitality companies have evolved this industry. I know there was a comment about revolution. This industry has been evolving for the last 15 years to exactly that point. And the point I was making after the great financial crisis when this industry consolidated, is flexibility became the hallmark of the change from 2008 to where we are today. So that -- and I think I used the example is you can leave from New York today and stop at 4 different spots as long as you have the Club Wyndham currency to allow you to do that. And that could be a hotel, a studio in 1 location, a 3-bedroom and another for 1 day at 1 and 28 days in another. So totally agree with where that flexibility -- the consumer wants to decide -- make the decision. They want their hands on the wheel, and we've given them that for quite some time.

Would an Airbnb loyalty scheme or even a paid sort of loyalty discount scheme be something that would scare you?

No. I -- that's the space that sort of we're in. They appeal to a certain type of clientele. And I've had the question now for about 5 years about Airbnb. Do you -- are you concerned about what they're going to do your business. And my answer is, I think they run a great business. And what they have benefited our business is they brought to the mainstream conversation and acceptance that it's just nice to have a kitchen in a living room and especially in Orlando, where we're based. When you finish the day at Disney or Universal or SeaWorld, you probably want to be in separate rooms for about 20 or 30 minutes, and space gives you that, and that's where we've been. So that they, along with all the other vacation rental companies, have brought that conversation to no longer be. I'm definitely staying in a hotel, except for the small niche that's going to stay in a timeshare. Now everyone is saying, I just want -- I want a living room. I want groceries in my refrigerator, so I don't have to go spend $200 at a dinner. I get more value. So I think that's all beneficial. But I do -- but there are some differences. And one of the big differences is our market tends to want a brand they know clear expectations and amenities around their vacation. And there's plenty of room in this space for all of us to be highly successful. Great. Well, I think that's a good note to end on that. We've just gone 1 minute over. So thank you very much, Michael. That was enlightening. And thanks very much, everyone else for listening.

Thank you. Appreciate the time.