Q4 2020 Lindblad Expeditions Holdings Inc Earnings Call
Good morning, and welcome to the Lindblad expeditions, Inc. Fourth quarter, 2020 financial results Conference call all participants will be on listen only mode.
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Please note. This event is being recorded I would now like to turn the conference over to Craig Solvency Chief Financial Officer. Please go ahead.
Thank you Kate.
Good morning, everyone and thank you for joining us for lindblad for 2024th quarter and full year earnings call with me on the call today, the spend lindblad, our founder and Chief Executive Officer, Sven will begin with the opening comments and then I will follow with some details on our financial results and liquidity before we open the call for Q&A you can find our latest earnings release and the Investor Relations section of.
Of our website along with the presentation regarding the acquisitions that we announced this morning.
Before we get started let me remind everyone of the company's comments. Today may include forward looking statements those expectations are subject to risks and uncertainties that may cause actual results and performance to be materially different from these expectations. The company cannot guarantee the accuracy of any forecast or estimates and we undertake no obligation to update any such forward looking statements.
If you would like more information on the risks involved and forward looking statements. Please see the company's SEC filings. In addition, our comments may reference non-GAAP financial measures a reconciliation of the most directly comparable GAAP financial measures and other associated disclosures are contained in the company's earnings release and with that out of the way, let me turn the call over to Sven.
Thanks, Craig and the good morning to everybody and appreciate you joining us today, while preparing for this review for 2020 and my.
Thoughts on the future I look back at my comments sort of a year ago on our 2019 year on coal I couldn't have been more wrong as it related to expectations regarding the effects of COVID-19.
We saw it turned out to be of very very different and Sars 911 of 2000.
Eight 2009, economic crash and really anything else fire you have ever experienced.
This is now an event to the shutdown.
And most of other travel businesses globally for.
The year and while we are optimistic that we will be selling against soon exactly when that will be it's still not share.
No one in our lifetimes as experienced such a long lasting business interruption outside of the war.
As Charles Darwin suggested and the seminal book the origin of species.
The most of the intellectual that survives it is not the strongest survives the the species of survives is the one that is able to adapt and adjust to the changing environment and which it finds itself.
And the Lindblad expeditions, we are indeed adaptable and the entire organization is very much focused on how not to let this crisis COVID-19 waste we have done it before over our last 40 years and we are determined to come out of this pandemic is strong and vibrant of company.
Once again to take our guests for the world's most remarkable destinations.
So what are we done that ensures that this will be the case.
First and foremost, we shored up our capital position and Greg will discuss this further but it started immediately upon shutting down and our operations last March and it's still a focal point today, we have been inordinately successful cutting cost across all facets of the company without destroying the fabric for Maria.
For us.
We also were opportunistic with regards to raising additional capital externally.
We added $85 million through of preferred stock offering and in December we added an additional 85 billion of low interest bonds right. The main street lending program.
As a result, we ended the year with over 200 billion Inc.
Total cash which provides ample runway.
And as we returned to operations, which allows us to further invest and augmenting our future.
One of the areas that we continue to invest and significantly is the building a building or a.
Capabilities across our marketing platform.
The process that we had started in earnest prior to the pandemic pushed out of it which was which he we had paused once the pandemic took hold.
As you may be aware, we hired a new chief marketing officer at the end of the year, David Goodman, who was previously the head of global marketing and digital media at Sotheby's.
And the architect of the long of their online digital platform. He has hit the ground running we are taking advantage of the current level of.
And in operations and redirecting resources, both financial and human to come out of Covid with the vastly more powerful marketing engine built for growth.
We have already grown out of social followers by 150% over the last quarter and we're planning on launching of new websites during the second quarter with our new reservation system to the problem.
And the result would be more dynamic platform, leveraging data and insights to be more efficient and effective.
And with our marketing spend.
Aside from investing on our existing operations. We also using our strong capital position to continue broadening our product platform to serve and all the diverse clientele interested and diverse travel experiences.
And that was the first of its stunning results prior to the pandemic, having more than doubled its contribution in 2019 for one we acquired the company and 2016.
And we are using the lessons learned from that acquisition regarding the expansion of our addressable market cross promotion and product marketing and system integration as a blueprint for the latest additions to our platform.
We are extremely pleased to announce the acquisition of two additional companies joining our portfolio that are natural comp and complements to our existing product offerings and off the beaten path as it Bozeman, Montana company that was founded with the goal of facilitating the exclusive of work.
The creation of possibilities largely and the American West and the southwest It has since expanded the job geographic reach but still remains focused on the core business as originally envision the.
North American National Parks.
I have known and worked with off the beaten path for the past two decades, when we were ourselves and move on.
And we've collaborated on the variety of programs, including extensions for some of our ship expeditions with the core large the CVR is an outstanding leader and he's enthusiastic and they continue to need OBP into the next phase of gross.
Dubai and cycling and adventure company was founded and 1996 by Andy Levine, who is still the company's CEO of Dubai.
<unk> is the very high and adventure travel company exploring the world by bicycle.
Biking, and general is exploding, particularly with greater production and use of Ebags, which significantly broadens the demographics of potential participants and bicycle tour.
I'm extremely excited about.
Bringing this self powered for them of travel into our orbit as people become more and more health conscious of this business should naturally grow and appeal and the cross marketing potential would be significant and accelerating Dubai and its growth.
Together with that have these business.
And as dramatically increase our addressable market and we're at the beginnings of creating a platform that can accommodate multiple interest and as a consequence keep travelers and the family so to speak.
And the cross market and developed technological synergies the smaller companies could never justified for afford.
It's very exciting and when you look at the possibilities of our platform can provide expedition cruising as far as the Africa exploration of the U S National Park biking through Burgundy to name a few.
And the opportunity the combined packages using the expertise of all of the companies is endless.
These two new additions are relatively small, but very focused on what they do and are at the top of the food chain and in terms of quality and trust.
Each of in isolation and may not be overly contributor of finance rate today of a strike.
We see of we see real opportunity to grow them and the years ahead, and certainly they will add value to our brand more broadly is the diversify and travel the aggregate.
We are the idea of a company to aggregate and unique small brands and make them into a bigger hole, we know how to energize the key elements and made them attractive. We are insiders, we understand their worlds, we respect and value of the founders, we know where we can help and we're and could not get and the way.
And you can find more information regarding these acquisitions and the presentation that we have posted to our website. This morning.
As we integrate off the beat and pass and design and we continue to look for additional opportunities to broaden and deepen our product and platform. While also evaluating the variety of options to further increase the capacity of our fleet.
Since 2017, we've added three new builds for the fleet with the for the National Geographic resolution and anticipated for delivery in Q4 this year.
For the addition of the resolution, we would've increased our available guest nights and spend more than the 70% over the last for years and thus far we have been able to maintain occupancy levels and expand on that.
Yeah.
There are certainly of growing demand for expedition travel and our long track record of delivering authentic and immersive experiences positions us well to capitalize on this trend and it for.
For banner.
This balance strategy of focus on expanding our existing operations, while responsibly, adding to our current fleet and acquiring companies, which broadened our platform.
And my belief of solid approach to grow on that.
Traditions for the long term and we believe our offerings of particularly well suited for the times.
These recent articles and they're just too which reinforces our value proposition.
The nature of wellness and giving back the trending for 2020 on travel.
Forbes magazine and February seven 2021.
Nature, wellness, and giving back having space debris and there's the new luxury travelers of seeking the remote destinations and open spaces.
[noise].
The second article how wheel travel and 2021 and the financial times quoted of post Lockdown and the yearning for open space along with the anxiety about crowded spaces, that's brought remote empty destination to the top of many wishes for.
2020 months.
And.
And there are more and more articles out there every day.
And talking about this phenomenon of people.
On the travel there's pent up demand and they want very often with the go to places that are non crowded.
Well, we are well we are well positioned for sustained long term growth. We are obviously focused on returning to operations.
For the 12 months was suspended.
Suspended Saturday of this has been the far longer than anybody would have anticipated last March our startup team continues to work diligently on our robust set of stringent protocols and we.
We're in constant dialogue with local authorities.
And that we have where we have long standing relationships and guest demand remains strong from both returning travelers as well as new audiences. We have canceled all voyages through the end of may but remain optimistic and we.
We will return to operation in June with the phone.
On the Alaska, Galapagos and Iceland.
The June it looks like most of it not all adult Americans will have had the opportunity.
To the vaccine, which clearly will accelerate to that and looking ahead, we are already well positioned with strong bookings for the back half of the year and throughout 2022 and.
And the pent up demand, we are seeing and the market will build upon the strength.
Before I finish up let me speak for the idea of giving back and I'm happy to see the business with the business community and media are beginning to recognize the importance of this more broadly.
The human brain is wired with definite priority, we are extremely well suited to swerve out of the weight of the non company vehicle, we react swiftly and with the urgency where threat because of day or a second wave and.
The other words, we of wire to respond to clarity of the threats not so much of those that unfold over time like climate change, where the potential collapse of biodiversity and these are real challenges that if not directly and urgent they faced will create an unbelievably the future for generations to come I believe that the travel industry.
As both an opportunity and the responsibility to engage our audiences with not only of the wonder of what we provide them, but also with an understanding of the challenge of these patients face and ways in which they can as a consequence of having experienced the place helped with support.
We have used our unique position to enhance and support the places we have come to love and which you've given us so much joy and business value and.
2019, we committed as a company to go of carbon neutral, meaning that we went deep into all of our activities in order to find creative ways to reduce emissions and those that remain and had been offset 100% all of our ships, our offices and staffs and crew travel and are.
Guests appreciate this and perhaps look a bit differently at their own engineers each year, we part as part of the Lindblad expeditions National Geographic the fund raised between one five and $2 million from our guests to support Conservation Science education and exploration.
100% of the strongest directly support specific projects.
Our guests really appreciate being able to participate.
This year, we launched the Galapagos Islands relief fund and the Galapagos over 80 for 80% of all of employment relies on the tourists.
It had been devastated the health and wellbeing of critical to the health and protection of the ecosystem of global Joel.
The fund is the micro loan program and with initial goal of 500 thousands of dollars between the company and our board of Directors and me and my wife personally we offer the challenge Grant of 150000 and gave our Galapagos travelers and the opportunity to participate to date the farm together with the matches has raised over 300000 and and.
The easily reach our goal of the second round of fundraising and our guests really appreciate this opportunity and the people of Galapagos, even more so.
Why is this important and in the earnings call.
Because success is made up with many parts and social responsibility is an important component it matters guests depreciate the assets personnel the value of what we do and the people and places where we travel and I appreciate all of that.
And as well.
And our cumulative efforts are meaningful in terms of the work done I'm totally convinced that these sensibilities, our corridor of success as a brand and.
And our reputation.
We've been at this for decades, we built for the business based on respect and understand the geography, the same for the aspirations of our guests.
We offer something of that people deeply deeply and perhaps even need a connection with wonder authenticity and the opportunity to explore.
We represent optimism and the troubled world.
We are ready to emerge from this traumatic dark time, and build and grow and capitalize on the frustration of people pad and being restricted.
We are ready with open arms to the provide adventure inspiration exploration.
And George to the millions who have been denied all of this for over the year.
We will thrive in the post Covid world.
It will grow in the post Covid World and we will succeed and the post Covid World.
Thank you for your time today and now let me turn the call over to Craig.
Thanks, Pat before I begin and let me once again, thank our dedicated crew and across the world as well as our diligent office of personnel for the resiliency. During this uncertain period and for their commitment and preparing us to return to operations, while preserving capital wherever possible.
It's been nearly a year since we closed our operations and we continued to execute on the comprehensive plan. We put in place back in March of last year to fortify our liquidity position and this was and remains an imperative for two reasons first <unk>.
And the uncertainty around when operations resume and how quickly they will ramp back to normal levels. We want to ensure we emerge on the COVID-19 pandemic as the same strong and vibrant company. We were prior to the cessation of operations with the expanded capacity and the ability to capitalize on the growing demand for expedition travel.
Second building a strong liquidity runway allows us to be opportunistic with regards to additional growth drivers both organically and through targeted acquisitions.
As a result of the proactive steps. We took this past year. We ended 2020 with $188 million of unrestricted cash and $17 million and restricted cash related primarily to deposits on voyages that originate in the United States and $95 million increase over where we ended 2019.
We previously discussed the reduction of our cash burn, which I will highlight for Q4 and a moment as well as the $85 million, we raised and August through the issuance of redeemable preferred stock to a diversified group of high quality long term focused investors.
This past quarter, we further enhanced our liquidity position with the issuance of $85 million under the main street expanded loan still the program.
This loan which has the five year tenor and carries an interest rate of LIBOR, plus 3% has solidified and emerge from this pandemic later this year, we will do so as the strong company poised to regain the momentum we had prior to the virus and also provided us additional financial flexibility to look for opportunities to augment our long term growth profile and.
As you have seen we did just that with our recent acquisitions of design and off the beaten path. Sven has walked you through the strategic rationale of each so let me lay out the financial parameters.
Combined the total acquisition price was approximately $10 $5 million comprised of $8 7 million and cash and $1 8 million of Lindblad stock.
And while not yet material to our current earnings as Sven mentioned and we do believe there is a significant opportunity to grow these businesses given their strong brands and attractive addressable markets combined with our marketing platform expertise and resources plus we have the blueprint having grown natural habitats from $3 9 million and EBITDA in 2016 the here.
The acquired them to over $8 6.002 million 19. We also think this is just the beginning and we will look to continue to be opportunistic on both the M&A and organic growth front.
Turning to our operations during the fourth quarter all of our ships remains safely laid up but the minimally required crew and we continue to minimize ship and land based expedition operating and capital costs, We did spend a little over $1 million on maintenance Capex of this past quarter, primarily due to dry docks for the explorer and endeavor to as we prepare to resume selling.
For the full year 2020, we managed to reduce maintenance capex by over 70% versus our original budget for the year.
And on the advertising and marketing front and we suspended the majority of our spend during the fourth quarter, focusing primarily on digital opportunities and paid media that was generating appropriate returns with regards to future bookings and we continue to minimize and general and administrative spending through employee furloughs workload reductions and the elimination of all nonessential travel and office expansion.
And discretionary spending.
Looking at the P&L. The measures we have taken enabled us to reduce total operating expenses before depreciation and amortization interest taxes by 70% during the fourth quarter versus the same quarter a year ago on the cash front, we lowered our cash spend this past quarter to $26 million, which included approximately $18 million of.
Operating costs $5 million, and principal and interest payments and $3 million and Capex, the cash and cash usage was partially offset by the positive net cash flow from guests as payments for future travel exceeded guest refunds on rescheduled voyages.
And on the voyages canceled and reschedule of thus far which primarily includes extra the expeditions through the end of May the majority of our guests continue to opt for the future travel credits as opposed to fault refunds and as I mentioned last call a refund of exposure is significantly lower and moving forward as the majority of our unearned revenue is for travel where the guests have already decided on their feet.
And your travel plans.
Turning to current booking trends and demand for travel continues to be very strong and we are well situated for once we return to operations later this year as well as for 2022.
Bookings for the back half of 2021 are currently in line with where they were for the second half of 2022, a year ago and when you look ahead to next year. We are currently 37% ahead of where we were for 2021 at the same time of year ago.
The strong year on year trends.
<unk> guess do reflect guests on canceled voyages that are often to reschedule the only make up about a quarter of our bookings for the remainder of this year and 16% and for 2022.
And we're also seeing strong new bookings for both returning guests as well as new audiences and we have only just begun to marketed and earnest focusing on digital targeting and social opportunities as well as increased outreach to the trade advertising and travel advisors.
Based on the feedback we are getting from guests. We believe that there are of significant pent up demand to get out and explore the worlds of major geographies and these efforts will secure additional bookings for this year as well as next.
As we work towards resuming operations, we estimate that our cash usage will return to 10% to 15 million monthly on average, including all ship and office operating expenses necessary capital expenditures and expected interest and principal payments, but excluding any new guest payments for future travel and refunds of previously made guest payments. This includes the ramp and marketing spend I just referred.
To spending on our digital transformation project, and bringing back furloughed employees as necessary to prepare for resumption and operations.
Looking at our debt obligations, we ended the year with $496 million and principal outstanding and increase of $266 million from the end of 2019. This reflects the incremental 85 million of main street loan during the fourth quarter as well as the drawdown of $45 million under our revolver earlier and the year.
During the year, we also borrowed $108 million in conjunction with our final payment upon delivery of the national geographic and endurance and March and an additional $30 5 million for the third installment payment for the National Geographic resolution and April.
And with regards to on leverage covenants of the company has worked with its lenders to amend its existing credit agreements, including the suspension of leverage ratio Covenant through June 32021.
Turning to our expectations for 2021 due to the uncertainties around COVID-19, we are not providing P&L guidance. At this time, we will continue to update our anticipated cash usage as circumstances evolve.
And from our operational cash usage, we anticipate maintenance capex in the 15% to $17 million range, which includes modification of ventilation systems across our fleet to increase fresh air flow and mitigate the spread of contaminants gross.
The gross Capex, which includes costs for the resolution and spending on our digital projects is projected to be between 75 and the $80 million this year.
This does not factor in any potential new shipyard that we continue to explore.
The remaining contract installment payments on the resolution of our fully covered by our second export credit agreement with 15 million of scheduled to be drawn on April and $45 million drawn upon delivery of the ship, which is still anticipated to be towards the end of this year.
Lastly in 2021, we will also have approximately $10 million and principal payments predominantly for payments under our export credit agreements.
As we move closer to resuming operations the steps, we've taken to reduce costs and increase our liquidity runway will enable us to emerge from this pandemic as a strong company ready to once again capitalize on the growing demand for expedition travel at the same time the strategic steps, we are taking to expand and enhance our product platform will provide us further avid used to drive long term growth and build the <unk>.
<unk> shareholder value and the years to come. Thank you for your time this morning, and I'll spend and I will be happy to answer any questions you may have.
We will now begin the question and answer session to ask the question you May Press Star then one on your Touchtone phone.
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Our first question comes from Steve within ski of Stifel. Please go ahead.
Hey, guys good morning.
And so spend and what we wanted to be sure that I heard you right, but it sounds like you fully expect to be operational now in June and.
And some capacity level and that's it sounds like a focus around Alaska, and I think thats, yes, thats pretty important given the obviously the bigger cruise operators are essentially going to be restricted from that market. This year. So I guess the question is.
And I assume the demand for that type of product is it has to be extremely extremely strong and I guess are there any issues with getting your passengers into position to actually.
And I get to Alaska, and hopefully that all makes sense.
Yeah, No I don't I do not believe there is an issue of getting our passengers.
Guests to Alaska at all.
We have a very deep relationship with Alaska Airlines.
Which has been cultivated over many decades actually and.
And we're in constant.
Recession with them about how the landscape is changing when we're anticipating starting et cetera et cetera.
As I think I've mentioned before as well, we've had a team and place us.
Since the very beginning of the pandemic starting in April.
Over the last year, where the.
Whose charges to really.
Constantly.
The new information in terms of.
Opportunities related to the protocols vaccines et cetera, and so and that's been a very dynamic aspect of our business and we talk about it.
Literally every day and our management meetings.
And where are we and what have we learned is does it how does it change the landscape at all and and we believe everything is moving and it very very positive direction.
Certainly in terms of people getting vaccinated, which is the.
Total game changer, and we believe that.
And certainly by the end of June.
By the end of June for pretty much everybody in the United States, who wants to be vaccinated had the.
The Trinity.
And certainly most people in our demographic by the by the end of May will have been.
Given the opportunity and vaccinated. So this is the big big deal in terms of the.
Getting the world moving again and relationship to travel.
Okay got you. Thanks, and then the second question would be.
And it really of bigger picture question, but just about competition and.
Obviously theres a lot of competition. These days for markets like Antarctica, The Galapagos, where it seems like every operator is trying to move some type of asset into those markets.
So I guess the question is what do you know what keeps you guys at this point and such a and such a good position I mean is it something that your assets at this point can go to places where other competitors can't go is it.
The the length of service of your of your captains or how would you position yourselves or what do you tell folks and you know in terms of the way you market yourselves as to why you should take our lindblad product versus somebody else's.
Oh.
Well just using Galapagos as an example.
The the amount of new entrants really isn't changing and there are.
Certain number of these licenses they're called Coopers.
And and what they do is the occasionally change happens from one company to another but the the maximum number of people or the other.
<unk> of those Cooper's hasnt changed and.
And many many many many years.
So.
And.
Unlike and Darci go where anyone who wants to go down there can can basically do that.
Not sure on the Galapagos.
And.
But and I talk to get certainly.
Nor the number of ships have been built and are continuing to be built and there are they are focusing on on.
These quota of areas for a variety of reasons and.
And so it is going to become.
And certainly more competitive but there's also it's happening because there's clearly defined growing interest in the in the geography I believe the.
Leg forward, if you will.
As.
We are the pioneers of these.
Most regions of the world actually, but certainly I talked to you guys.
My father began and his company bringing people.
And drugs getting 19th of 66, and so theres a legacy of factor.
It has been built into a trust structure.
That I believe is meaningful.
We put tremendous price.
Priority and to the quality of our marine teams.
I don't care, what anybody says that dark for good does pose.
And the unusual circumstances that can become threatening.
The people, who are not incredibly well trade so our captains of bin.
Moving to and card.
Over 100 times on.
And they know the area of backwards and forwards and then.
And our expedition leaders the.
Officers on the on the.
The bridge there are just extremely knowledgeable and we talk about that a lot because we believe it is it's not important to people that should be.
And it's.
It's a very distinguishing factor I don't believe anybody else has the depth of experience.
The depths of personnel and the depth of respect for that geography, and in fact every geography, but that one happens to be run and what are you need you need to.
Bit more respect and had a lot of others because it can hurt you if you.
Don.
Okay got you thanks, guys appreciate it.
Okay.
The next question is from Chris <unk> of Deutsche Bank. Please go ahead.
Hey, good morning, guys.
Wanted to I wanted to ask you again, you sound pretty confident that you'll you'll be able to get back and of <unk>.
Couple of months.
How do you say some of the.
On the changes of the protocols that youre going to be required to do and all of the various.
Nations how of those kind of changed and evolved over the past couple of months and.
Are you pretty certain at this point that the the goalposts don't don't move again at the.
Last minute.
Yeah, I don't I don't believe that those goalposts will move and a negative way.
We have been.
<unk> bin.
So deeply.
And tune or engaged with people.
Not only from the CDC, but from.
The state of Washington, the the medical community there.
I can't remember her title right now, but the director of House and.
Cosco and.
And we knew that various.
Requirements, we're going to be developed even before they were and.
And we were really on top of those and began.
Constructing our protocols around what we anticipated was coming.
And so I do believe that our protocols are the strongest in the industry.
The strongest and the industry and I believe that the.
The authorities.
Recognize that.
And in certain instances they've looked at our approach to this has the potential blueprint to they might require.
Uh huh.
The industry wide.
And I don't want to be specific about the institutions right right now but.
Absolutely the case and.
So we feel really buttoned up as it relates to protocols.
Made changes on our share of physical changes on our ships as it relates to the ventilation systems, where necessary and we agree.
Really put in the the hard work to make ourselves, it's almost impossible to reject going forward.
Yes, Chris is the correct one of the other things that I'll mention is some of the requirements have certainly changed over time and the steps that we've taken previously will make it easier.
The deal with those moving forward, especially because of some of the things that we're going to have to do will be less relevant and so for example, when we first started looking at getting back into operations. One of the things that we spent a fair amount of time on what charter flights for the various destinations that we serve.
And with the advent of the vaccinations those charter flights and many of them on that would be necessary. So the cost components of those certainly go way down and we've also secured the testing requirements of the testing capabilities have already been solidified for us. So we will have the capabilities of doing that how much we have to do that and how often remains to be seen.
But we already have the capabilities to do that so I think of lot of the investment that we needed to make has already been done and.
And if anything moving forward and there'll be less restrictive than we originally anticipated.
Okay. Thanks, very helpful and then on the.
The acquisitions, we announced this morning, both look pretty pretty interesting question is.
If you look forward I mean, I guess, how how broadly can you cast the net and and then from a from a more of a financial point of view.
How do you underwrite the use in terms of and it isn't of value potential value of a customer that you might acquire or is it.
Something something else in terms of making these businesses not just more profitable bottom line the growing their top line and it's just difficult for us.
Get a better understanding of how you underwrite some of the smaller companies that you see.
Yeah.
And then Craig my way and as well, but.
Here's the.
And here's the basis of it.
Our travelers and we've known that for a long time are very.
They're very they're never it's in their interest so you might run into somebody in the dark here of one year of the next year there'll be on a Safari and Africa.
The following year they want good.
Total around.
The.
Southern France or whatever and.
And.
At the end of the day, if we create a family of companies.
The can provide.
Interesting opportunities and there and the areas of their diverse interest like for example, if you of a family that one day.
And with us.
Grandmother organized regenerate and they came to Antarctica.
That's the very extravagant.
And they may not do that type of thing again for many many years, but they'll do other things because they are kind of committed to doing things of the families. So the more we can offer them. The more we can keeps them in the family so to speak and the.
The cost of acquiring new guests.
And drops dramatically once they've had a positive experience.
And so this notion of keeping on the family to US is a big deal.
It <unk>.
Very very cost effective it's been proven with NASDAQ and the cross marketing between ourselves and that.
It's just grown exponentially year after year after year and.
And it's become really meaningful for both.
Both of organizations.
And.
It keeps them if we if we're smart enough and creating the and creating a broad enough platform of which we're absolutely committed to do.
It keeps them from going on needing to go elsewhere and there are so many benefits as the consequence of that.
Yeah, Yeah all of it.
On top of that Sven aside from the capturing a greater share of wallet from the existing travelers, you're also going to be able to help them to increase and their loads right. So.
These are very strong businesses and very strong brands that were built by some very strong founders.
And what we bring to the table as we bring and operating expertise that we've been doing and for many many years, even before we acquired natural habitat, but now including natural habitat and if you can increase the occupancy across all of these opportunities you'll certainly be able to ramp revenue relatively quickly you look at what happened with natural habitat, having gone from 45 million.
The revenue back in 2016.
Most of have been well over $80 million of revenue and 2020, it's a pretty fast ramp and that was done partially by cross promotion, partially by adding additional marketing leverage partially by adding and increased occupancy so.
And if there is a unique opportunity across both of these assets moving forward.
Okay very helpful. Thanks, guys.
The next question is from Greg <unk> of Sidoti. Please go ahead.
Yeah, just a quick question in light of the digital marketing higher.
And I believe pre Covid you guys made it had a step up year and your marketing efforts.
And if I'm correct on that just I guess it sounds to me like you might be moving more and the digital direction is that the case and kind of what has been that I've.
Run rate when things normalize that we should be thinking about if that's correct.
I'm not sure of hard parts of the net run rate part of the question sure.
I was just curious is there going to be savings as you move more dollars if you're moving more dollars towards digital advertising is this a potential savings the effort.
And from or is it just a better return on the on what Youre seeing out there.
More dollars moving into digital advertising is just giving you a better return.
And let me, let me take that Sven and you can chime in afterwards so.
The question is an interesting one because you are not comparing apples to apples right. So when you think back to where we are today versus where we were pre pandemic. The amount of inventory that we have across our ecosystem has gone up dramatically increase the number of beds. We've increased the number of high price beds. So the the.
On the notion of reducing marketing is probably not at the forefront of what we're trying to accomplish here, especially given the explosion that we're seeing in the space and we want to be able to capitalize on the explosion of the space, but what we will be able to do because of this digital transformation and it can be much more efficient with that spend so we'll be able to target folks with regards to the.
The marketing materials that the receding and a much more focused manner, which will allow us to have a higher return on the marketing dollars that we're spending and we could also be a lot more flexible and it's a lot easier to turn the spigot on or off when youre looking at digital spend did versus when you said and Hardcourt brochure.
And it's gonna be a marriage of the old and the new as we move forward and we'll be much more efficient as we move forward and we can certainly tweak that up or down based off the returns that we're getting as we're spending.
Great. That's helpful. And then just one final one and.
And as things return normalize.
And you start to ramp back up efforts and June is there any.
Relief, you'll see on dry docking as the ships have been stationed or is that just still kind of in place on the top.
It goes over every three years or so.
And there won't be any meaningful difference in terms of the drydocking.
Some of those dry docks are regulatory you have to do the memory.
It depends which shipped and which flag.
And that won't change.
There are certain work were just delayed.
At the moment as the.
The consequence of the pandemic.
We will do and the future that we had originally planned to do.
But no material change.
Okay. Thanks, a lot.
As a reminder, if you have the question with Star then one. The next question is from Swan Lauren of undervalued shares. Please go ahead.
Hi, good morning, everyone, So spin and Craig you've spoken a lot about building a platform and you've just announced these two acquisitions and neither one of which is the cruise ship company.
And this is maybe more of a question for spin and say if you look out 10 years into the future.
Would you still see lindblad expeditions as primarily a cruise ship company or would you see something more like a broad of travel company specialized in nature and exploration experiences.
I I think the latter because I think we still have quite a bit.
I swear and nice to hear your voice.
Yes, the lumpier.
Yeah, I hope you're well on.
Sure.
And any case.
The expedition ship aspect of the business that I believe will absolutely be.
The dominant in our entire mix.
No change no change of that but we will but we will have added a considerable amount of other opportunities because of what we'd really believe we should be doing and and our.
And in the past the do it.
As to be a diversified.
The adventure experiential travel company.
And there are lots of different ways in which people people travel and I think of applying our ethos to that and and.
And and then particularly working with which is the the aspect of this which I find the most interesting.
Founders of companies travel companies.
And our special grade of people they have you know.
Deep passion deep commitment.
To what they're doing and so there they are tremendous resources and.
What day.
And you need to have great ideas, you need to have the right capital structure and you need to have the right.
And the ability to market, what you have and very few of these have all of those things on.
Almost all of them have the first.
The ability to create compelling ideas.
Most of them don't necessarily have a deep financial structure.
And and.
And marketing is elusive.
To some degree because of it.
It's become a very sophisticated idea of how do you market.
And in today's world it's.
And the advantage that we have as we built the marketing platform and the.
Constantly building and and.
And augments our marketing platform built for four for God.
<unk> 30.
<unk> thousand.
Plus and growing rapidly ship travelers.
And so we can apply a lot of that technology to these companies and give them something that they've never really had before.
Rather than having to build everything from scratch all the time, which is what these companies have to do they have to build all of the systems from scratch.
And as limiting when you're a small company.
Yeah.
So I really look forward to this for this opportunity to work with entrepreneurs to work with founders.
And to recognize and appreciate the extraordinary.
Creations, they have developed and.
To augment those efforts with some practical.
The structural.
Needs and such a way to make them more far more productive and far more profitable.
We had considered at one point do we want to build the land business for and we caught referred to and it's the language.
Ourselves because we were prior to nine of 11 deeply involved and the land business.
But what we did after 911, and we decided to focus purely on our ships.
And to really focus on where we had fixed commitments and and if that turned out to be of very good idea.
Focus is a really meaningful.
Idea of when it comes to building travel businesses and so we we decided no we were not going to go back and build these ideas ourselves. We're gonna of develops on through the acquisition of <unk> of confidence enabled companies and.
And so now we have three of them and.
And we are looking very very closely.
Whereas we're on the next opportunities this regard.
Thank you that makes a lot of sense and if I can just ask one follow up question. Please.
And obviously your platform and your marketing it depends a lot on the National Geographic link that you have which is an amazing link and Theres always that looming date of that partnership expiring. The next time in 2020 fives I will be the appreciate you cant look not fine for the future, but is there something you can do or you could say to alleviate.
And you want the worries about that's coming up for renewal and in four short years.
Yeah.
This is a very.
The mutually productive.
Relationship.
That has now gone on for.
Upwards of 16 years.
And so we feel very confident that.
And we will continue beyond 2025, because it'll be and our interest and that will be and their interest.
And so I just don't see the deep deep longstanding relationship and I don't see any reason why it shouldn't continue.
Great. Thank you best wishes for for this amazing year.
[laughter] sweat.
Yeah.
This concludes our question and answer session I would like to turn the conference over to Craig <unk> for closing remarks.
Thank you everybody for joining us this morning, and we look forward to speaking over the next couple of days about the full year of the fourth quarter and the acquisitions that we just completed thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Alright.