WYND
#Yes, Chris, it is <UNK>.
So when we use the term sort of alternative inventory acquisition models, it really reflects two distinct approaches.
One is as <UNK> described, Ovation is where we go to our existing owners who have used the product and had a lifetime of enjoyment with the product and their exhibiting use patterns, I would say they are not using with as much frequency, we are reaching out to people and offering them an alternative to be able to sell their product either through a referral to a reseller or to us directly as sort of a graceful way to exit the product and in certain instances, continue to use the product for a period of time.
That is an area that we have been pursuing for a number of months now.
I think it is still relatively new information and the effort continues in a more formal way as we speak.
The other avenue that we approach is to go to homeowners associations to whom inventory has been defaulted and we go to homeowners associations and offer that we will pay the ongoing maintenance fee and we will also resell the inventory and so we are able to acquire inventory for very economic costs through that channel as well.
So those two factors are the factors that have driven the lower cost of goods trend and I would say we continue to expect that we will see more of that as we go forward.
So I wouldn't describe them as one time but I would describe them as opportunistic in a sense that these are sources of inventory acquisition that haven't been fully utilized that we are now utilizing probably more formally and with more determination than we have in the past.
I think we have quoted in the past that we expect 60% to 70% of our inventory ---+ I think it is around 60% of our inventory ---+ spending in a given year to be earmarked to what we consider to be capital efficient sources and they would be the two sources that I just described to you, Ovation, direct to owner or direct to homeowners association.
And then our asset affiliation model, which we are in full swing of implementing.
So I think that is the best we can do at quantifying our commitment to this type of inventory acquisition but I think everyone should expect to see us continue to do that well into the future.
If I could, Chris, I just want to respond to the question that came up earlier about the amount of inventory spend in the first quarter.
The number was around $60 million.
It really depends on the success of these programs but I would say that we would hope that it would be able to sustain these rates for a bit in cost of goods sold.
But once that opportunity, once we have recovered this inventory from homeowners associations and owners, there will be a steady flow of it on an ongoing basis but there has been this sort of buildup of opportunity that we are just tapping into as we speak.
You are welcome, Chris.
Yes and no.
Yes on the add back of deferred revenue; no, on the VAT reversal.
Actually, <UNK>, that is our global conference that we hold every 18 months for all of our franchisees.
It is one that I have commented on that we had about 6000 people at the conference.
They pay a fee to attend the conference and we pay the cost of putting on the conference.
So in essence, it is a pass-through but it does bump up the revenue and also bumps up the expenses in the quarter that it happens.
As I said, we do this once every 18 months.
But it is a breakeven, <UNK>, so we are not making any money on those.
No.
I'm going to sound a little bit like a broken record, <UNK>.
We will look at everything that is out there, everything that makes sense.
We will only do things that obviously are good for the Company and we do not forecast, project or schedule acquisitions because you really can't forecast opportunity.
You have to be prepared for it and when it presents itself, we are ready to move.
We are thrilled with the Dolce acquisition we did earlier this year.
The integration has gone extremely smoothly.
It is a great business and it will continue to add great value.
We already have quite a few of the Dolce folks here integrated into our offices in Parsippany and we are thrilled to have it part of the team.
Thanks.
Our growth that we forecast for room growth is 3% to 5% ---+ I wasn't sure if we had 2% to 4% or 3% to 5%.
The reason I was confused was this is a confusing year.
It is normally 2% to 4% and this year we said 3% to 5% because we were adding the Dolce rooms in as well so that obviously increases our growth rate.
So we are comfortable with that 2% to 4% as a long-term growth prospect.
And the pipeline, <UNK>, I wouldn't focus too much on for us frankly because we are not a lot of new construction property, we do have some new construction.
But we have properties that we sign the franchise agreement and open them the same month so you don't even ever see it on a pipeline.
Because we are largely a conversion company, pipeline has a little bit less impact and a little bit less of a predictor, probably more of a predictor on international frankly than on the US.
Yes.
Constant dollars, I thought it was a plus.
It was around flat, I thought it was down 1%, <UNK> thinks it was up 1%.
We will see if we have that here handy.
We'll get the number for you.
Again, remember that that is where we have the Chinese impact of adding more rooms internationally in China which has a lower RevPAR than the rest of the world.
RevPAR in China.
I don't have it in front of me right now.
Well, we feel very good about the team that we have in place.
If there is one area that we probably could use some more strength, it is in the international market where we grow very nicely but we do not have as many people on the ground if you looked at the balance of our sales force or development group on the ground in markets like India versus what we have here in the US.
It is not even a fair fight.
I think over time what we will see is the international markets we will continue to add development people internationally.
In the US, we certainly could take advantage of constantly changing and reorganizing our development effort here in the US.
We are also always refining it and making it a little better but we have a pretty efficient and very effective team here domestically and so I think probably to answer your question, I would say international more than domestic.
Well, we do provide key money on managed properties and we have for a long time.
That is the competitive landscape.
So yes for like Wyndhams which we are managing.
On the new construction side, the two that are probably getting the most attention right now are Wingate by Wyndham and Microtel and we are only doing key money basically where we are getting management contracts and we don't look at doing mezzanine as a standard way of doing business.
But we do have programs in place example with Wingate where we do provide a key money for new construction.
And so the answer to the question is yes, but limited.
It is not our standard operating procedure.
We are doing it with Wyndham of course as well, <UNK>, in certain international markets particularly in China, there is a bunch of new build Wyndham activity going on.
Not where we are providing key money.
(multiple speakers)
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