Participants

Michael Hug; Chief Financial Officer; Travel + Leisure Co

Michael Brown; President, Chief Executive Officer, Director; Travel + Leisure Co

Dany Asad; Analyst; Bank of America

Chris Woronka; Analyst; Deutsche Bank Securities

David Katz; Analyst; Jefferies

Patrick Scholes; Analyst; Truist Securities

Lizzie Dove; Analyst; Goldman Sachs

Stephen Grambling; Analyst; Morgan Stanley

Ben Chaiken; Analyst; Mizuho Securities

Brandt Montour; Analyst; Barclays

Presentation

Operator

Greetings and welcome to the TNL fourth-quarter 2024 earnings call. (Operator Instructions)
As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Hug, the CFO. Thank you. You may begin.

Michael Hug

Thank you, Shamali, and good morning to everyone. Before we begin, we would like to remind you that our discussion today will include forward-looking statements. Actual results could differ materially from those indicated in the forward-looking statements, and the forward-looking statements made today are effective only as of today.
We undertake no obligation to publicly update or revise these statements. The factors that could cause actual results to differ are discussed in our SEC filings and in our earnings press release accompanying this earnings call. And you can find a reconciliation of the non-GAAP financial measures discussed in today's call in the earnings press release available on our website at travelleisureco.com/investors.
This morning Michael Brown, our President and Chief Executive Officer, will provide an overview of our fourth-quarter and full year results and outlook. And I will then provide greater detail in the quarter, our balance sheet and outlook for 2025. Following our prepared remarks, we will open up the call for questions.
With that, I'm pleased to turn the call over to Michael Brown.

Michael Brown

Good morning and thank you for joining our fourth quarter earnings call. As you saw on our press release this morning, we finished 2024 with strong momentum, which has continued thus far in 2025.
For 2024, we delivered $929 million of adjusted EBITDA. Our vacation ownership business fueled our 2024 success, led by tour growth of 8%.
We also saw growth return to travel and membership with adjusted EBITDA up 2%. Our integration of a core vacation club from a people, process, and performance standard all exceeded our year one expectations.
For 2024, the foundation of our vacation ownership plan was to deliver tour growth to achieve topline sales. Our vacation club sales for 2024 were within the expected range. Tours led the way with 8% growth, offsetting an expected mixed-driven VPG reduction of 1%.
The overall result was 7% growth in enterprise-wide gross vacation ownership sales. The continued VPG performance drives strong adjusted even to margins and reflects a product offering with a solid value proposition backed by a world-class sales and marketing organization. Aligned with our plans, new order transactions increased in 2024 to 35%, a 185 basis points increase from 2023.
We expect our new owner transaction mix to be in the range of 35% to 37% in 2025. As we focus on VOI new owner sales growth, we're excited about our partnership pipeline. We signed several national and regional partnerships in 2024, which included Allegiant Airlines and Live Nation. We believe these partnerships will provide incremental cross-marketing and lead generation opportunities which we expect to lead to a multi-year incremental tour opportunities.
We will be focused on ensuring those partnerships come to life as we progress throughout the year. We will continue to push on our existing Blue Thread marketing channels as they begin to mature while also looking to find incremental blue thread opportunities.
We saw consistent demand at our resorts from owners, guests, and rentals. Overall occupancy remains strong, and owner satisfaction rates stayed consistent in 2024 from prior year.
Late in 2024, we launched the new Club Window map, making it far easier for our owners to search and book their next vacation.
Thus far in 2025, there have been approximately 40,000 downloads, and we are seeing more than 80% positive reviews highlighting a strong user experience. Early indicators show increased user engagement with a 30% higher booking conversion rate than that of the owner website.
This year we will completely revamp the WorldMark by Wyndham website and launch a new WorldMark app. This is one of our greatest opportunities to further increase the satisfaction of our second largest club member base, which has consistently had the highest satisfaction rates in our system. All in all, our core Wyndham vacation ownership business remains strong, with a clear path for growth in 2025 and beyond.
Turning to a core vacation club, ABC contributed $6 million adjusted EBITDA on an expectation of $3 million to $5 million. This is a great start to the relationship with the core hotels and a reflection of the hard work by the team to integrate and strengthen the business post-closing.
Both tours and VPG remain above our initial projections while the integration of the two organizations and cultures has been virtually seamless. The success of 2024 allows us to be increasingly confident in our ability to capture the opportunities for continued financial growth, along with an increase in new sales locations.
As an update on Sports Illustrated, we continue to make progress with the physical launching of this brand. There remains great interest for additional locations, and we anticipate several announcements this year and plan to begin sales for Sports Illustrated in 2025.
Turning to travel and membership, I'm very proud of our travel and membership team and the progress they have made this past year. We achieved growth within our adjusted a range of flat to 2%.
Specific to the exchange business, the structural headwinds did not abate. Further consolidation continued, and the migration from external to internal exchanges put continued pressure on the exchange business. Those headwinds were offset with the growth in our travel club business and a very tight management of cost. Again, our team at travel and membership was very aligned and decisive in achieving this target.
Capital allocation was once again a highlight in 2024. We paid a $2 per share dividend for the year and we purchased 7% of outstanding shares. As of December 30, 2024, we had repurchased 38% of our shares outstanding at the spend.
We also remain disciplined in our allocation of free cash flow toward inventory spend and capital investments. Our inventory spend remained at less than half of annual pre-COVID levels, and our capital investments remained stable at approximately $100 million per year.
Let me now share our strategic direction for the upcoming year. We will continue to execute against our core timeshare and travel and membership business plans, which we expect to deliver mid-single digit adjusted even to growth and allow us to generate significant adjusted free cash flow.
We will continue to execute against our disciplined capital allocation strategy and expect to return capital to shareholders through share repurchases and an increased dividend while continuing to evaluate potential strategic transactions.
We will capitalize on our 2024 Accor Vacation Club successes and expect to continue to grow sales and adjust it even enough for that business. We also plan to launch Sports illustrated sales this year. Given our current momentum and the strategic outlook I just laid out, we expect an adjusted even a range of $955 million to $985 million in 2025.
I will hand it over to Mike to further elaborate on both 2024 results and 2025 Outlook. Mike.

Michael Hug

Thanks, Michael. As well as discussing our fourth quarter results, I'll provide more color on our balance sheet, cash flow, and outlook for 2025. All of my comments will refer to comparisons to the same period of the prior year unless specifically stated.
We reported fourth-quarter at just $252 million an increase of 5%. And adjusted to deliver earnings per share of $1.02. For the full year, adjusted EBITDA with $929 million and adjusted EPS was $5.75. Our full year even our performance was solid despite significantly higher interest rate and variable compensation headwinds of $37 million in total. And keep in mind that the full year 2023 adjusted EPS had benefit from foreign tax credit carry ports of $0.35 per share.
During 2024, we continued to drive strong, adjusted even to margins across our businesses with full year adjusted even a margin at 24%. Looking at the fourth-quarter performance of our two business units, vacation ownership reports segment revenue of $813 million with adjusted EBITDA increasing 7% to $222 million. We delivered 175,000 tours in the fourth quarter growth of 2%, and VPG was $3,284 above the high end of expectations.
In regard to the portfolio, as we talked about at the end of the second quarter of 2024, we saw delinquencies higher at the end of Q1 and Q2 as compared to historical levels. Throughout the second half of the year, we saw the GAAP to historical levels tighten slightly, and our provision for the full year ended right at our second quarter full year guidance of 20%.
For 2025, we're expecting the provision to remain around 20%. Revenue in our travel membership segment was $157 million in the quarter compared to $158 million in the fourth quarter of the prior year. Adjusted EBITDA was $52 million flat compared to the fourth quarter of 2023.
As expected, exchange transactions were down 5%, reflecting the continued mixed shift of clubs whose members have a lower propensity to exchange. But this was offset by travel club transactions which increased 9% and also saw an increase of 6% in revenue per transaction.
Moving to our balance sheet, our financial position remains strong, and in the fourth quarter, we continue to return capital to shareholders to share repurchases and our quarterly dividends of $0.50 per share. For the full year, we repurchased $235 million of stock and paid dividends totaling $142 million for total capital return to shareholders of $377 million.
We also invested approximately $50 million inclusive of inventory for the acquisition of the Accor Vacation Club. As you saw in the press release, we completed two important transactions in the fourth quarter.
We closed our third timeshare receivable financing of the year, a $325 million dollar term securitization in October with a 98% advance rate. Also, in December, we executed an $875 million dollar secured loan facility, which was primarily used to refinance the $282 million term loan due in May 2025 and reprice our 2029 term loan.
The combination of which we expect to save approximately $5 million in annual interest expense. Adjusted free cash flow was $446 million for the year, resulting in a 48% adjusted EBITDA to free cash flow conversion. And we ended 2024 with our net corporate leverage ratio for covenant purposes at 3.3 times. Remember, our goal is to end the year below 3.4 times leverage.
Overall, our capital allocation for the year was right in line with what we anticipated when looking at our share repurchases, quarterly dividends, business acquisitions and year-end leverage.
Now let me provide some more detail about our expectations for the full year and first quarter 2025. For the full year, we are providing a guidance range of $955 million to $985 million for adjusted EBITDA. We expect gross VOI sales in the range of $2.4 million to $2.5 million with VPGs in the range of $3,050 to $3,150. For travel membership, we expect adjusted EBITDA to be flat to up 2% in 2025. For the full year, we expect an effective income tax rate of 28% to 30%.
The rate is above what you might have otherwise been expecting due to the impact of (inaudible). Adjusted free cash flow conversion for 2025 is expected to be in excess of 50%. It's also possible that during 2025, you will hear us discuss the impact of foreign exchange in our results more than you have in the past due to the volatility in the dollar.
During the first quarter, we expect adjusted EBITDA in the range of $195 million to $205 million, with first quarter VOI sales of $495 million to $515 million. VPGs at $3,150 to $3,250 and a tax rate ranging from 29% to 31%. As we continue to deliver on our strong and consistent return of capital to shareholders, we intend to recommend to our Board a first quarter 2025 dividend of $0.56 per share, a 12% increase over our fourth quarter dividend. In closing, '24 was another year of strong and consistent performance by the team at Travel & Leisure. We take great pride in our performance and our 2025 guidance reflects the continued confidence we have in our business.
With that, Shamali, can you please open up the call to take questions.

Question and Answer Session

Operator

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions)
Dany Asad, Bank of America.

Dany Asad

Thank you, good morning everybody. It seems like VPG in the quarter came in ahead of your outlook and tours were a little bit below. So if you just unpack what drove that and could kind of throw some numbers around explaining the difference.

Michael Brown

Good morning, Danny. This is Mike Brown. Let me just try to cover '24 and '25 together while hitting Q4. Super proud of the team on 8% growth for 2024 for the full year. And 2025, we have a great degree of confidence in that mid-single-digit to growth level. When you look at those full year then you can dig deeper into the cadence of both of these years.
2024, we really benefited in the first half of the year from the investments we had been making over the prior years on new owner tour generation. As we got to the midyear point, I think we called out on our Q3 call, we had some softness in the Las Vegas market. Some of that continued into Q4.
What I would also add to that, which is very typical for our business is as we get toward the end of the year and with all the investment we've made over the last three years, we did start to look at lower performing marketing channels and call some of them out. That had an impact late in Q4 as well as what we expect in the first part of this year.
But the culling of low performing channels, plus the addition that we called out on our partner marketing efforts and the regeneration of regional marketing efforts for the summertime means the cadence this year will be lower in the first half of the year against tougher comps in the first half of last year, and then you'll see a very steady ramp up as the year progresses on a year-on-year growth basis. All in all, I just come back to where we stand for 2025. We have a lot of confidence in that mid-single-digit tour growth level for the full year.

Dany Asad

Understood. And maybe this question is for Mike, but the VPG -- okay, so I understood there was a little bit of calling going on. Would VPG have still been up like we're trying to quantify of that like relative to your expectations, how much of that was from calling and how much of that is underlying strength in either pricing or close rates or whatnot?

Michael Brown

So [3,284] in the fourth quarter was a great quarter. Were we aided by some mix adjustment, meaning heavier toward owner VPG absolutely. But when you were to strip that out, you'd still be above $3,000, and we have consistently been above that $3,000 mark over the last four years, and that is a level that is really powerful for our business model. So yes, it was one of the advantages of us getting sort of 37%, 38% new owner mix earlier in the year. It allows you to be more strategic in the fourth quarter, a, address lower-performing channels.
And two, maximize your EBITDA and margins as you head into the next year. So it was a great quarter, beated by mix adjustment, but even if you equalize there, you're still going to have a really strong VPG for Q4. Most of that VPG was price-related or transaction-related as opposed to close rates, which remain pretty consistent year-on-year.

Dany Asad

Understood. Thank you very much.

Operator

Chris Woronka, Deutsche Bank.

Chris Woronka

Hey, good morning guys. Congratulations on a very solid year. Was open maybe we've talked about propensity to finance? And if you're seeing any kind of change in trend there, especially as you mentioned that you're getting a slightly higher mix of new first-time owners. So is there anything to any of the trends we are seeing on the financing side?

Michael Hug

Good morning, Chris. This is Mike Hug. Thanks for the question. We really haven't seen any changes as far as the propensity to finance other than when we make a decision to encourage more or less financing. So in terms of the consumer, we're seeing continue to remain consistent in terms of a good quality consumer with that minimum 640 FICO. You can see it come through when our average FICO for 2024 was 744, which is the highest in the history of the company.
So really not seeing more cash financing needed at the table to close the sale. I think consumers were seeing remain strong on VPG. And I would say you see it in terms of our ability to generate good quality to flow and have a really FICO on the loans we do originate.

Chris Woronka

Okay. Thanks, Michael. And just as a follow-up and it might be for Michael. So travel clubs and memberships, you've done exactly what you said there in terms of -- you've run that thing for cash. You've taken -- been very disciplined on costs. So I guess, looking forward, is how much -- is there any thought to doing something transformative there? Or do you think, hey, there's enough small things in the pipeline to make a difference and just kind of keep growing that at a modest clip.

Michael Brown

Holistically, when you look at how we are currently transforming this business, we recognize the structural headwinds on the exchange business. We've continue to evolve the way that business is run effectively. And at the same time, over the last three years, we've launched a new travel club business, which is a business outside of timeshare. This evolution, although initially didn't go to the quantum that we expected has been a consistent grower for us over these last few years. And the way we're looking at it, Chris, is this traveller membership group is now holistically growing its transactions, albeit those transactions come at different margins.
So something very important happened in the fourth quarter. We actually grew year-on-year for that total travel membership business transaction-wise, and we expect that to accelerate in 2025. So our first priority, getting to your question with that background is we want to continue to grow this business organically because we believe it has the ability to grow organically, although with the evolution I just mentioned, but like with everything else, Vacation Ownership and Travel & Membership we won't do that with blinders on. We'll always look at opportunities if they're out there, but we're very happy with our VO business. We're very happy with the direction of our Travel & Membership business. But that won't prevent us from always looking at better ways to return capital and to grow our business at a faster rate.

Chris Woronka

Okay, very good. Thanks, Michael.

Michael Brown

Thank you, Chris.

Operator

David Katz, Jefferies.

David Katz

Morning everybody. Thanks for taking my question. Congrats on your quarter. What I wanted to do was in a sort of higher level, just get your perspective on consumer receptivity and strength, right? There's just so much inconsistency across all of our coverage and the consumer landscape in the economy. In the past, and frankly, the outlook going forward, I'd love to have your perspective on it and what you're seeing.

Michael Brown

Absolutely, David. Let me start, and then I'll hand it over to Mike here at the end. And there's really been four data points that I've consistently communicated. On a macro level, we always look at the consumer sentiment, the study that comes out of the University of Michigan, which has remained consistent here in the first part of the year, which is just a macro view in general. Then we get into our business and the leading indicator for us that we get to measure every day is that volume per guest.
And that volume per guest has been incredibly consistent for us over the past few years elevated from what we originally anticipated. And that's an affirmation every single day of people, not only appreciating that the product offering is showing value in this inflationary environment but also that their usage of it remains their vacation choice.
And I know we consistently share this statistic, but seven out of eight of our owners have fully paid for their ownership, and we have a 98% retention rate on it. So for our product, value, consumer acceptance and usability remains super high at the moment. We also talk about forward bookings. There's a lot of consistency year-on-year. We are just a tad behind where we were at the same time last year on forward bookings.
But we're only 45 days into the year. So for me, that doesn't indicate very much other than we've got a little bit of ground to make up to be flat to last year given that our owner base has been relatively consistent as well. So those first three, the macro sentiment our VPG, which is super strong our forward bookings remain very consistent. And then the last measure we consistently discuss is delinquencies, and I'll hand it over to Mike related to the portfolio.

Michael Hug

Good morning, David, as it relates to the portfolio, really two things, and I'll refer back to the -- at the sales table, we aren't seeing our consumers need more financing than they historically have in order to close the sales transaction. So that's a good sign to me in terms of still seeing a good quality consumer has the capacity to purchase at the same level that they always have. And then when you look at actual delinquencies as I mentioned in my comments, we saw the highest gap between historical delinquencies and 2024 delinquencies in the second quarter
We saw that gap close a little bit in Q3 and a little bit in Q4. So when we look at kind of how the portfolio has progressed while delinquencies are still away compared to historical levels, they're actually in better shape at the end of the year than they were at the end of Q2.
So overall, the portfolio continues to poach as Michael mentioned, is one of the things that we look at as an indicator of the strength of the consumer that is at the sales table on that on our product.

David Katz

Super helpful. And if I can just follow up quickly on the loan loss provision. I know we probably spend -- it's a metric that gets more than its fair share of time. But you've given kind of an updated guide of inside of 20% inside of 19%. And I just want to get a sense for, do you have kind of an aspirational level one day that you'd like to go to? Or do you think this is approximately the -- that we've arrived at the aspirational level?

Michael Hug

Well, I think longer term, we would like to be in the 18% to 19% provision range. Keep in mind, while people, when they look at the provision, they usually think about as far as the level of defaults and delinquencies and things like that. But for every incremental dollar that we finance, there's an incremental provision impact, right? So we -- of the earnings we get off the portfolio, it's a great portfolio. So when we do that, see that provision start to come down in the future, once again, guidance for 2025 is 20%.
But in the future, when we see it start to come down, we might make the conscious decision to ask for less cash at the table to get that portfolio growing at a greater rate and to get the higher net interest income. So I think in my mind, while it's important to look at it as a percentage of revenues, it's just as important to look at what's driving that. And it could be just once again, decisions we make to increase the financing so we get that great spread. But look, long term, 18% to 19%. And we'll start to see it come down when we see delinquencies get back closer to historical levels.

David Katz

Perfect, thanks very much.

Michael Hug

Sure, thank you.

Operator

Patrick Scholes, Truist Securities.

Patrick Scholes

Hi, good morning, everyone. Thank you. A question for Mike. Mike, given where your most recent securitization was priced and where you see rates today and your expectations going forward where do you see the current interest rate environment be either a headwind, tailwind or neutral or thereabouts for this year? Thank you.

Michael Hug

Yes. So look, it's a great question. That's probably one of the things since the election that has changed in a way that potentially negatively impacts the business. You look at the benchmarks are actually up 20 bps since October 31. So I would say when we talked back in October on the third quarter call, we expected that by the end of 2025, the interest expense on the ABS transaction from a rate perspective, which starts to be a positive.
It looks like now probably closer to flat for the year, maybe a little bit of a headwind. I think that the bigger impact is really when we look at 2026 and forward when the assumptions were maybe a little more aggressive as far as what interest rates were going to do.
So a minor impact in '25 probably doesn't become a tailwind at the end of the year like we thought, probably closer to flat for the full year, maybe a slight headwind, but we'll see what happens over the 8 or 9 months and really how that impacts the longer-term plan in '26 and forward.

Patrick Scholes

Okay. Sorry for me to quantify that maybe is it fair to think maybe 1, maybe 2-point headwind to at least at that?

Michael Hug

Yeah, you're probably talking -- I mean you're probably done $6 million in interest expense for the year potentially depend on what's -- with the transactions that we do in this year, the three that we plan to do this year, what they come in at.

Patrick Scholes

And a question for Michael--

Michael Hug

You're cutting out on us.

Michael Brown

Patrick, if you're asking your question, we can't hear it at the moment. Patrick, we didn't hear the question. Could you repeat it, please? Could you repeat the question, please?

Patrick Scholes

I'm sorry. I think my phone is breaking up. Can you hear me?

Michael Brown

We can. Go ahead.

Patrick Scholes

Okay. Michael, is it realistic to think regarding Sports Illustrated, we might hear announcement this year?

Michael Brown

So just to recap, we heard -- we only heard Sports Illustrated announcements this year, so I'm going to assume what the question was is our pipeline for additional Sports Illustrated remains robust. We do expect to make announcements this year. And just to provide a bit more insight is given the real estate markets these days we have been pursuing more closely conversion opportunities, which gives us probably a shorter path toward starting sales, and it gives us -- that's what gives us the confidence that between our existing location and opportunities that we anticipate announcing that we can get into sales in 2025.

Patrick Scholes

Okay, thank you.

Michael Brown

Thank you, Patrick.

Operator

Lizzie Dove, Goldman Sachs.

Lizzie Dove

Hi there, thanks for taking the question. I just wanted to go back to VPG. I think your guidance implies that 1Q is the high point and then a reasonable deceleration throughout the year. I understand there's a bit of a comp factor there, but it seems like a pretty conservative setup. Could you maybe kind of talk about the drivers of that? Any kind of product mix, geographical factors, anything like that, that's driving that [DeCell]?

Michael Brown

Well, Q1 tends to be our highest owner quarter, which is going to naturally drive a higher VPG on a total basis. As we move through the year, and it's important, I think, to come back to Dany's question on our cadence throughout the year on tour flow, we do expect our tour flow to accelerate as we move throughout the year.
The summertime is always our highest tour flow in our lowest VPG because we have our greatest new owner mix and add on to that and accelerating tour flow throughout the year. Both of those are going to drive a primarily a misadjusted [DeCell] in the middle of the year to get to our full year guidance.
So we do like the setup, but that's the cadence that we anticipate the year that the summer will benefit from additional new owner channels coming into play along with the normal seasonal guidance to bring our VPG down from what we'd anticipate in Q1. With that said, we still like the direction of where our VPG is hanging in and think that our guide this year is a very positive guide for a full year -- on a full year basis.

Lizzie Dove

Got it. That makes sense. Super helpful. And then just going back to Sports Illustrated again, I understand that we expect some announcements, but you said you're going to start sales in 2025. Any kind of color of how meaningful that can be for this year?
I think you've given some numbers in the past around kind of the size of that business eventually. Any other kind of details that you can share there?

Michael Brown

I would equate Sports Illustrated to Accor last year. The first year that we're in operation, it's about getting a sense for what can you learn in year one, the numbers will not be meaningful to this year, and they'll start to be noticeable next year, but I'm not even sure I would say meaningful next year. This is about getting the product right. This is about making sure that there's good customer acceptance to it and then doing any minor modifications to the physical product or the usage model. And that's why getting into sales is important.
You just for any new brand, you get a sense of what the market wants and then adjust off of it from your future projects. So that's our objective this year is to get into sales and start to get consumer acceptance in the individual markets we'll be in.

Lizzie Dove

Appreciate it. Thanks.

Operator

Stephen Grambling, Morgan Stanley.

Stephen Grambling

I may have missed this on [intro] comments. But I was curious where net owner growth kind of ended for the year and how you're thinking about owner growth in the year ahead as we think about both balancing new and selling to existing but where that could ultimately shake out?

Michael Brown

In total, our owner growth we had minimal owner growth in 2024. Most of that came from Accor Vacation Club acquisition. We are -- there's two aspects of the Wyndham businesses. We are consistently trading two types of owners. Highly satisfied owners that have been with us for 30, 40, 50 years.
But for whatever reason, our time to exit their ownership. What we're focused on is replacing those owners in that 35% to 40% of our transaction mix with new owners. And there's a reason we want that 35% to 40% to be our sweet spot because those new owners we're bringing into the equation have a greater lifetime value, obviously, than an owner who's enjoyed vacations over a decade to maybe even three that we want them to stay, but just naturally, there's a time and a place to exit their ownership.
So we are in a replacement mode at the moment. But it's one of the reasons that we are consistently talking about getting above 35% on the transaction mix, which we've done for me about a year ahead of our schedule coming out of the pandemic. And we will continue to have our foot on the pedal for growing our new owner base above 35% for the simple reason that we want to get back to net owner growth holistically and with that, a greater revenue per owner of the owner base that we do have.

Stephen Grambling

And I guess a related follow-up on this, and this is maybe an evolving question, but how are the new owners that you're getting in comparing to the existing and what kind of line of sight do you have on the traditional cadence of the upgrade cycle? Is that changing either in terms of timing of that or even the propensity.

Michael Brown

There was a point where we hadn't looked at the upgrade cadence in some time. We were consistently speaking about for every dollar purchase, you get $2.60 of additional VO purchase over the first 10 years, we went back and took a look at that recently, and it's been super consistent. I think that just speaks to the consistency of our vacation ownership model. And it's really allowing us to focus on how do we activate the consumer experience more, how to get more people on vacation and things that are going to drive an already high satisfaction, even higher. But simple answer to your question, it's remained incredibly consistent over the past five years.

Stephen Grambling

Great. Thank you.

Operator

Ben Chaiken, Mizuho Securities.

Ben Chaiken

Hey, good morning. Thanks for taking my question. Within VO, just curious on your cost of product or it was particularly low. Just curious if there's anything notable you're seeing in the inventory balance. Or is this just normal quarter-to-quarter fluctuation? And then one quick follow-up.

Michael Hug

Yes. So it's just normal quarter-to-quarter fluctuation as you know, with the way we sell the product first out basis. So really, nothing unusual there as far as any particular thing driving it. You can just have the fluctuations within the quarter as it relates to what inventories being sold. So nothing significant there.

Ben Chaiken

And then switching to the Travel & Membership. I think this was as referenced earlier in the call, but basically, this is your first revenue growth in about 18 months, if what I'm looking at is correct, driven by non-exchange. Maybe we could just touch upon what you're seeing. Is it simply easier comparisons? Or have trends inflected a little bit?
And then is the growth that you're seeing, again, on the non-exchange side, simply -- is it mining the existing customer base a little better? And then how do you think about sourcing and adding incremental customers to that B2B business? Thanks.

Michael Brown

Well, again, we were super happy with the 2024 performance. And with the size of that business, I do want to remind everyone, 1% movement in EBITDA is $2.5 million. So flat to do a pretty tight range for that business. On the revenue side, we have -- we took a step back and put a lot more energy into our existing travel clubs to make sure that we are maximizing the clubs that had already shown commitment to us in the form of using it and then growing that level of revenue per affiliate.
From there, the team has done a great job to pragmatically grow the clubs, not 10 at a time or 20 at a time, but two to three at a time to make sure that every new club we're bringing in is efficiently growing and intelligently growing so that we're not chasing quantity, but instead quality.
What I really like about the direction is that it is a consistent direction as we are in the process of growing the entire traveller membership transaction number. We think we will grow it in the full year of 2025. And from that, it's watching the margins, watching our cost and trying to triangulate the headwinds in exchange against the growth in Travel & Membership and aligning our cost structure.
It's a delicate balance. And that's why in the prepared remarks, I called out just really a disciplined form of management in 2024, and it's going to require to get in 2025 but we've got the right team. We've got the right outlook, and we'll be working hard to balance exchange, travel clubs and cost management in '25.

Ben Chaiken

Got it. Helpful. And then just squeezing one more in very quickly. Just a clarification. Did you already convert the -- within SI, did you already convert the hotel or real estate into the SI trust? Or are you saying -- are you suggesting that's what we should expect the announcement regarding?

Michael Brown

You should expect that the next real estate transaction we announced is going to be a property conversion as opposed to a ground-up development, the next announcement.

Operator

Got it, thank you.

Michael Brown

Thanks, Ben.

Operator

Brandt Montour, Barclays.

Brandt Montour

Good morning, everybody. Thanks for taking my question. So Michael, you made a comment about forward bookings this year being a tad behind last year. I'm just curious if you could -- if you care to flesh that out a little bit across perhaps the regions, different brand levels by consumer cohort or by segmentation. And then if it's owners versus package tours and nonowner tours, if that's the way you look at it or if that was just an owner comment?

Michael Brown

Well, first of all, it was simply an owner comment. Our total occupancy is pretty much the same as it was last year. We just like to look at forward bookings because owner arrivals is important for many reasons. The first and foremost is, I remember the former -- when I first joined the company, the former CFO of Wyndham Hotels said, your model is very simple when customers use their product, they love it and they buy more. And we want to drive owner arrivals because they love going on vacation and they buy more.
So it's a very important metric to us to focus on owner arrivals and our team here is between the launch of the Club Wyndham app between outbound campaigns over the phone and between a significant capital investment this year in our WorldMark club, it's all about that customer focus and getting them on vacation.
I do just want to make sure when I say what I just said, which is a significant capital investment in WorldMark, that's within what we typically spend in a year. We're not increasing our capital investment. We're just going to be dedicating a lot to that club because once we improve their website and their app, I think we're going to get even more bookings from that satisfied owner base. So that's really how we look at it. Again, it's the middle of February.
So it's -- we monitor these things that are very important. We communicate where we stand at any point in time to you all. But make no mistake, we don't -- we have a lot of efforts to get that number flat year-on-year, if not on a year-on-year basis.

Brandt Montour

Great. And then maybe for Mike on loan loss provision. We did spend some time on this already, but the loan loss provision increase year-over-year, you can look at it as a percentage of contract sales, you can look -- or VOI, you can look at it just sort of on an absolute growth, which was -- that grew faster than VOI net of WAAM. That increase year-over-year, Mike, what -- how much of it -- you said there was no extra propensity to finance that's been consistent. So how much of it was then mix versus the change in credit metrics?
I assume those are the only other two major factors, but if there's something else in there you can quantify, that would be helpful, too.

Michael Hug

Yes, the majority of it is just going to be the increase we saw in delinquencies in the first half of the year. So I would say it's credit, not in terms of what we're originating. Obviously, our originations are strong as they've ever been at 744, but you've got a $3 billion portfolio.
We're looking at delinquencies every month and kick up in delinquencies that we saw in the first half of the year is really what caused us on our second quarter call to move the guidance up to 20%. So I would say it's a portfolio performance as measured by delinquencies compared to historical levels.

Brandt Montour

Okay, great. Thanks everybody.

Operator

We have reached the end of the question-and-answer session. I would like to turn the floor back to CEO, Michael Brown for closing remarks.

Michael Brown

Well, thank you once again for joining us today. Before we conclude, I'd like to take a moment and recognize our field team members. This past year has been especially challenging with hurricanes that devastated the East Coast, wildfires out West, a tragedy New Orleans, which is just to name a few. In each case, I'm appreciative of the responsiveness and care our associates have shown to our owners and their fellow associates. They continue to reflect the best of who we are. Thank you to our field teams.
With that, both Mike and I look forward to seeing you in upcoming conferences and eventually on the Q1 call. Have a good day.

Operator

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.