Q1 2021 Viad Corp Earnings Call

[music].

Yeah.

Good day and thank you for standing by welcome to the be at Corp, first quarter 2021 earnings call.

At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.

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The conference.

Over to your speaker today, Carrie long with Investor Relations. Thank you. Please go ahead.

Good afternoon, and thank you for joining us for <unk> 2021 first quarter earnings conference call. During the call you'll hear from Steve Master, our President and CEO and president of Ges.

David Barry our president of the pursuit.

And Ellen Ingersoll, our Chief Financial Officer.

Certain statements made during the call, which are not historical facts may constitute forward looking statements.

Information concerning business and other risk factors that could cause actual results to materially differ from those in the forward looking statements can be found in our annual quarterly and other current reports filed with the SEC.

During the call, we'll be referring to certain non-GAAP measures, including loss of income before other items and adjusted segment EBITDA important disclosures regarding these measures, including reconciliations to net loss or income attributable to the yard can be found in table two of our earnings press release, which is available on our website.

At the odd dot com with that I'd like to turn the call over to Steve.

Thanks, Carrie and good afternoon, everyone. Thank you for joining us on today's call on this afternoons call. We will discuss our business performance. During the 2021 first quarter provide some insights into the recovery of our industries and review our liquidity position.

David will provide business updates for pursuit shortly and after that I'll share some business updates for GBS.

Ellen will cover our liquidity and financial results towards the end of the call.

Before I turn the call over to David I'd like to thank our employees for helping our businesses successfully navigate the ongoing challenges and uncertainty of the COVID-19 pandemic I.

I am confident that the strength drive creativity and flexibility of our team will continue to fuel our success as our industry has recovered and we capitalize on new opportunities for growth.

I'd like to now turn the call over to David to discuss what's happening across the pursuit.

David.

Thank you, Steve Although Q1 is the seasonally slow quarter for pursuit and despite the many challenges of operating during a global pandemic. We're pleased the finished ahead of our expectations for the quarter for us.

Food operations began their seasonal return towards the end of the first quarter Kenai fjords tours and steward of Alaska resume seasonal operations on March 13th and we had a strong march at the tail keeton of Alaskan Lodge, surpassing our expectations for group lodging business.

The ramp Jasper collection, we began the quarter subject to ministerial health orders limiting capacities and into our food facilities and as these restrictions lifted spending levels by our guests immediately rebounded to pre pandemic levels and we saw dramatic increases in per cap food and beverage spend at our top rank restaurants, Sky Bistro and farm and fire.

Q1 lodging performance in Jasper was nothing short of spectacular as we performed in line with 2019 with the strong results driven by high occupancy in our seven hotel properties and strong ADR and Revpar.

Flyover, Canada Vancouver remained in hibernation through Q1 due to government mandated closures.

And from a business standpoint teams all across the pursuit, we're constantly adjusting to temporary closure requirements distancing measures capacity restrictions and pandemic related operational changes.

Our teams have been nothing short of amazing and rising to this business challenge and I've been very impressed with their resilience their passion and their focus.

I know we of many team members listening to the earnings call today, So a big shout out and thank you to all of you.

Alan will go into greater detail on our financial results, but briefly revenue for the quarter was $9 8 million with an adjusted EBITDA loss of $9 1 million, which was $3 1 million ahead of the same period in the prior year.

This result was driven by maximizing all available revenue opportunities and maintaining a strong cost management focus.

We track many indicators and the successful operation of pursuit and we're encouraged by what we're seeing.

As restrictions have eased in different locations or revenue per guest spending has rebounded significantly as an example, effective ticket price of the Banff gondola is increased in each sequential month of 2021 and.

In food and beverage yields in February and March exceeded our expectations across our hotels advanced Jasper and Alaska. Our guests are excited to be out of joined themselves.

Revpar comparisons across the North American lodging industry are also something we track on a continuous basis and based on the reporting we've seen industry wide. The economy segment of the hotel industry performed at roughly 83% of 2019 Revpar levels.

In contrast, our lodging properties in Jasper outperformed the North American market with strong Revpar performance in Q1 at 98% of 2019.

Confidence in the future as another important measure we pay attention to we track the consumer confidence index quite closely as it is a great indicator of guest sentiment and confidence in the near term future.

The consumer confidence index improved dramatically in March of 'twenty, one climbing from 90 to 109. This is the single biggest boosting consumer confidence since the pandemic began and.

And we believe this increase in confidence has been driven by the availability of empower of vaccines. The speed of the actual vaccination rollout in the us and our belief among consumers that the worst is behind us.

And our business. This increased confidence level has manifested itself in the form of happy guests, making travel plans for the 'twenty one season.

We began the quarter at a normal pace of bookings and by the end of February of this booking pace began to accelerate dramatically.

More of vaccines combined with rising consumer confidence of had a positive impact on our booking pace for Alaska and Montana.

And of typical March we take between 300 450 bookings per week for Alaska.

Bookings for the 'twenty one season in Alaska are pacing between 700 1300 per week and the strong booking basis continued all the way through April.

In Montana, we're recording reservations at a record pace for the 'twenty, one season and in both Alaska and Montana. We're pacing ahead of the same period in 2019, and we continue to see strong compression in demand within these two markets.

I'll also note we're pleased to see more than just volume increases with strong rate improvement from 2019 across all our U S destinations.

As consumer confidence grows and restrictions. These were in turn confident the pursuit business will return to historic levels of performance and we're quickly resuming our growth journey.

This may take some patience to see the full effect, but at this point for for pursue the recovery is clearly underway.

Our refresh build buy strategy remains our focus as we look for growth in both new and existing geographies and I will shortly discuss a few of the growth opportunities we're executing on in 'twenty one.

In Iceland, we were able to maintain operations throughout Q1 of flyover Iceland in accordance with capacity restrictions and international borders remaining closed for most of the quarter Phil.

The ever Iceland continues to rank very highly on the Tripadvisor list of Icelandic attractions at number two and maintained its position as the number one choice of Icelanders to redeem their government stimulus gift cards.

We're impressed with the pace of Iceland border reopening protocols and anticipate the new regulations in place, allowing those who are vaccinated to enter Iceland without of quarantine will drive summer traffic from the U K and the U S <unk>.

Ensuring a successful and strong summer tourism season for Iceland in 'twenty one.

So let's talk about Sky lagoon in just two very short years, we succeeded in taking an incredible idea and turning it into a year round of traction.

A terrific example of buy and build from our refresh build buy strategy.

Laguna opened its doors for the public April 30th to great fanfare and critical acclaim, you've had very strong web visitation to the Sky Lagoon Dot Com website and we're on track for a very positive start with this new high margin attraction.

We anticipate the Sky lagoon will have a positive impact on our visitation levels in all season. As this is the weather proof and must be attraction that will have strong perennial demand.

Switching back to Western Canada, we remain positive on our prospects as infection rates of side vaccines become more widely distributed and eventually borders reopened between Canada and the us.

The situation requires patients to be sure of.

Cross, Canada conditions vary greatly by region and the consensus is that vaccines will be widely available for those that want them by the third week of June.

We expect strong regional and national demand from Canadian Us they are required to stay closer to home and Canada's backyard, we have some of the most iconic and unforgettable destinations for them to visit.

We've continued to expand in Q1 of driving our strategy with the acquisition of the Golden Skybridge, our newest attraction.

And we're really pleased to have this unique family friendly experience within pursuit. It's located 90 minutes west of Vance and surrounded by five national and provincial parks and open to the public in early June and.

In its first season of the Goldman Skybridge will operate seasonally but by the second year of operation it'll be open year round. It is truly a beautiful location and will quickly become a must see bucket list of traction.

And you can see all of the latest imagery. If you visit the Goldman Skybridge Dot com.

Back in 2019, when we acquired the controlling interest in Mountain Park lodges. The transaction included the very last hotel development site in all of Jasper.

We're pleased to announce today that we broken ground on the construction of the new 88 room hotel in Jasper that will sit between two of our existing properties the environment Lodge and the <unk> Ridge Resort and Conference Center.

This project is a terrific example of build within the refresh build buy framework as the new hotel will operate year round and expand our leading share of the Jasper bed base.

The new hotel property will be opened for the 2022 peak summer season, and will allow us to accommodate guests in the state of the art quality with a bundled hotel and attraction product, which will help drive effective ticket price margin Revpar and ADR growth.

This new hotel project also allows us to bring 50 for employee housing beds online through the reconfiguration of some existing lodging product, helping our colleagues in Jasper living affordable and safe housing.

Strong progress continues to be made on the completion of flyover Las Vegas, and we're on track for our opening in September of 2021.

Vegas returns to a 100% capacity in June and we're also pleased to report that we've completed the filming of the main feature fly over the real wild West and are now in the post production phase.

As an exciting build project, we're able to bring this strong revenue stream to life with very healthy attraction margins and will operate on a year round basis, helping balance pursuits earnings counter seasonally.

Las Vegas is a strong and viable destination 12 months, a year and we cannot wait to be open.

Across the team members of ramping up for the 'twenty, one season, while maintaining our safety promise and our overall commitment to safe hospitality for both guests and staff.

We're very encouraged by strong early booking trends and the significant levels of pent up demand.

We still have some local conditions that will require patience and a steady hand, but overall, we remain confident that the power of our iconic places combined with strong perennial demand will propel our recovery forward Steve back to you.

Thanks, David now switching over to Ges since mid March of 2020 of the live event of industry has been acutely impacted by the pandemic.

With substantial progress being made in the number of vaccinations were seeing restrictions ease and face to face events are beginning to take place again.

During the first quarter, we worked with our corporate clients to produce their virtual and hybrid events like northwestern mutual.

As restrictions cap northwestern mutual from holding their annual in person meeting they turned the ges to re imagine their event in the virtual world.

Bridging our creative strategic and content capabilities as well as our in house studio production, we delivered on our clients' mission and exciting and energetic event connecting employees around the world.

We also produced some smaller in person exhibitions in Florida, Texas and other markets in the us and the United Arab Emirates that have already lifted restrictions on larger in person events and recently Las Vegas, the world's largest event market announced that the city would start hosting large scale exhibitions at a 100%.

<unk> starting in June.

This is a very strong indication that the industry's recovery is beginning to take hold.

We continue to hear tremendous interest from our clients about producing there in person events in the second half of 2021 and have already started planning their 2022 events.

While virtual solutions have been unnecessary substitute during the pandemic I'm sure. Many of you would agree virtual events have not been able to fill the top of the sales funnel like in person events have in the past and do not present, the networking opportunities that in person meetings offer.

Surveys of exhibiting companies have overwhelmingly shown but virtual events are nowhere near as effective or as valuable as face to face and generating sales driving brand awareness and loyalty and engaging with attendees.

While virtual technology has been a part of the evolution of live events. We believe the technology complements an in person experience, but does not replace it.

So I clearly remain bullish on the future from face to face events and I'm equally as excited about the transformation, that's taking place within ges over the last year.

We use this period of very low business activity to drive significant changes at an accelerated pace.

As I've discussed on prior calls we've moved to an outsource model for certain non core services and we've shifted more activities to a variable or freelance labor model.

These changes have allowed us to significantly reduce our costs, while revenue is constrained and will allow us to gradually scale costs up as revenue returns.

We've also permanently reduced our annual fixed cost base by about $10 million by exiting and downsizing facilities. In total we exited 21 leased facilities across our warehouse and office network. During 2020 during the first quarter, we were able to shrink our Las Vegas warehouse footprint.

By about 100000 square feet as a direct result of outsourcing our carpet depot streamlining our service offering and reducing our office requirements.

We also completed a sale leaseback transaction of our Orlando area of production facility, which freed up about $14 million in capital.

I am incredibly proud of the Ges team for embracing and driving these important changes while also taking care of our valued clients and keeping a sharp focus on new business development.

The pandemic has obviously caused a lot of financial hardship for live event companies and we've seen weaker competitors exit and others struggled to keep going nuts.

Naturally businesses and associations want to partner with suppliers that have staying power and this has become another differentiator for us during the pandemic we've.

<unk> of onboard at more than 30, new corporate clients over the past year and continue to see very strong RFP opportunities. We also have more large events booked in the back half of this year than we would in the normal year.

This is due in large part two of compression of the event calendar due to ongoing COVID-19 restrictions in the first half of the year.

But it also demonstrates the desire of our clients to resume in person meetings.

Want to caution that the exhibition scheduled for 2021 is still evolving as organizers of attempt to gauge where and when it will be possible to safely hold face to face of events, but of the us and the UK. Our two largest markets continue to make strong progress in the vaccination efforts and us more locations loosen their restrictions.

We are becoming increasingly optimistic that the show schedules for the back half of the year will hold and perhaps improve and while it's looking more likely that we will see a greater number of events during the third and fourth quarter than a typical year. They may be smaller in size than pre pandemic levels.

As in person events activity picks up the changes we've made to ges's cost structure and operating model have prepared us to serve our clients with a more flexible cost structure and a lower breakeven point due to the permanent changes that we've implemented.

I am excited about the future for Ges as a stronger and more profitable business that will once again generated strong cash conversion for our shareholders.

And now I'd like to turn the call over to Ellen to discuss our liquidity and financial results in more detail Ellen.

Thanks, Steve.

With continued impacts from COVID-19 restrictions during the first quarter, we maintained the sharp focus on controlling costs and maximizing revenue wherever possible and we finished the quarter with the solid liquidity position.

We realized revenue of $19 1 million as we supported our clients, primarily with virtual and hybrid events for a face to face events remained largely shut down.

This was down approximately 93% from the 2021st quarter John.

Adjusted segment EBITDA was negative $14 2 million and included a $9 $1 million gain from the sale of our final Aes owned warehouse as we continue to free up capital and shift to a more flexible cost structure across GTS.

As Steve mentioned, we also downsized our warehouse footprint in Las Vegas, primarily in connection with the downsizing we recorded a restructuring charge of $2 8 million at Ges during the quarter.

At pursuit, we experienced the smaller year over year revenue decline of approximately 28%.

As we drew visitors from our local and regional markets, while international travel remains restricted during the seasonally slow quarter.

Pursuits first quarter revenue was $9 8 million and adjusted segment EBITDA was negative $9 1 million.

As David mentioned earlier per seats adjusted segment EBITDA improved by $3 $1 million year over year, Despite lower revenue.

This was largely the result of vigilant cost control and approximately $2 million in wage subsidies offered by the Canadian government.

Our net loss attributable to the AD was $43 2 million for the quarter.

And our net loss before other items of 39 million, which excludes restructuring charges of traction startup costs acquisition integration and transaction related costs and other nonrecurring expenses as applicable.

During the quarter, our total available liquidity decreased by approximately $40 million, which included funding for the development of precedes the flyover Las Vegas the traction.

Christy its acquisition of the new Golden Sky break attraction.

We had previously guided for a decrease of $45 million to $50 million, we continue to carefully manage working capital across the business and during the first quarter, we experienced stronger than expected inflows from advanced customer deposits at per se.

Bookings for the summer have accelerated.

We limited our operating cash outflow of approximately $33 million for the quarter.

And our capital expenditures totaled $9 4 million and were mainly at pursuit for the flavor of Las Vegas attraction.

Additionally, we raised net proceeds of $14 1 million from the sale of the Ges warehouse and acquired the new Goldman Skype for get traction purpose for $7 $2 million net of cash acquired.

We ended the first quarter with total available liquidity of approximately $229 <unk>.

Including unrestricted cash of approximately $35 million capacity on our revolving credit facility of approximately of $140 million and an additional $45 million available to us through a delayed draw commitment from Crestview partners.

At March 31, 2021 of our debt totaled approximately 370 million, including approximately $301 million drawn on our revolving credit facility.

The financing leases of approximately $63 million and approximately $6 million of debt at our flyover Iceland attraction.

Our revolver debt matures in October 2023, and the longer term of amendment that we secured in early August provides us with financial Covenant relief until the third quarter of 2022.

And as a reminder, during this covenant waiver period, we are required to maintain minimum liquidity of $100 million.

Although we are not issuing financial guidance at this time I'd like to briefly comment on our liquidity and financial outlook.

We expect the 2021 second quarter, we will see revenue improvements at both pursuit and ges relative to the first quarter.

However, we still expect to be well below pre pandemic levels due to continued restrictions.

Pursuit of second quarter revenue will be affected by the Canadian border closure, which was recently extended through May 'twenty one.

And the live event industry as Joe in the early stages of reopening for face to face of events.

At pursuit of our season, our properties are starting to open up for the peak summer tourism season, and will have two new attractions online this quarter.

I'll again, which opened last week and the Golden Sky Bridge, which we are preparing to opening early channel.

As David mentioned, we are seeing strong advanced bookings in pursuit of geographies outside of Canada.

And within Canada, while the board of remains close we will continue to keep our focus on the local and regional markets to drive visitation in occupancy while carefully managing our costs.

Based on our level of bookings at pursuit and Ges. We currently expect our operating cash outflow will flow to somewhere in the range of $20 million to $25 million for the second quarter down.

Down from a $33 million outflow last quarter.

Additionally, we expect to spend approximately $20 million in capital expenditures.

Including growth Capex for flyover Las Vegas, the Golden Skybridge, and our new hotel in Jasper.

Which brings our total expected cash outflow for the quarter to 40% to $45 million.

This would leave us with total available liquidity of at least of $175 million at June 30, yes.

Moving into the third quarter, we expect per se. It will once again, the cash flow positive and likely with the larger employers in the last year's third quarter with three new World class attractions online.

Additionally, our current level of contracted events at Ges, which includes the previously reschedule of my next Bill suggests that we will also see positive cash flow from Ges return during the third quarter.

Of course, this largely at accounts and continued improvements in the pandemic landscape.

Visibility remains challenging in this environment and we are ready to respond to shifting restrictions and pent up demand as the ministry of this year.

We're fortunate to have a solid liquidity position with the ability to selectively invest in compelling growth opportunities of pursuit.

And we continue to evaluate other growth opportunities that align with proceeds from refresh build buy strategy that we can push day when it makes sense to from the liquidity perspective.

And with that I'll turn the call back over to Steve for some concluding remarks.

Thanks, Ellen after a full year of navigating the challenges of COVID-19, we have become a stronger nimbler and more resilient team.

We work diligently making difficult decisions to make sure not only endured the pandemic, but is positioned to emerge stronger and I'm very proud of our team and grateful for their efforts during this time period.

We have improved our business in ways that will have a lasting impact on shareholder value.

Yes, we have reduced in variable is our cost structure and freed up capital in a pursuit. We've continued to selectively invest in high return growth opportunities aligned with our refresh build buy growth strategy.

There are clear signs of pent up demand at both pursuit and Ges.

Pursuits iconic assets in World class hospitality service creates inspiring and unforgettable experiences that cannot be replicated.

Ges's lives of face to face events provide a powerful and cost effective way to drive business growth from transacting business to building brand loyalty.

As the number of vaccination continues to increase and COVID-19 related restrictions lesson, we are seeing increased demand and optimism for both leisure travel and in person events were eager to get back to building on the exciting growth success that we had prior to COVID-19, and are confident that our long term strategies for our businesses.

The pandemic will lead to strong shareholder value creation, we remain committed to delivering extraordinary experiences to our guests and our clients.

And to creating long term value for our shareholders.

Thanks, again to our hardworking and dedicated employees, who make all of the as possible and thank you to our shareholders for your continued support and VR and with that we'll open up the call for questions.

As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key please standby, while we compile the Q&A roster.

Your first question comes from Tyler of batteries from Janney. Please go ahead.

Thank you good afternoon.

Few questions on my end I don't want to start on the.

The pursuit side of things and just in terms of the border close between the us and Canada and I understand the nobody has the crystal ball, but just looking at the commentary from the government and the vaccine situation up there a little bit different but in the United States. The border were to remain closed for the entire summer.

Can you just talk about how that might change your strategy for the business, particularly on the backdrop for pass US whats you might be able to do to its Phil.

Operates effectively without some of the tourism coming from the us.

Yes Tyler.

It's a good question. So a couple of things one is remember we did operate all through the summer last year during 2020.

With the strong lockdown across Canada.

We were EBITDA positive across all geographies in Q3 of 2020, and we expect that we're going to be able to operate successfully even with the border closure and we are optimistic that the efforts underway in terms of vaccines and someone will lead to an acceleration very similar to what it did.

In the US TV example, if you look at Jasper lodging compared to say 2020.

56000 room nights on the books.

Thousand 20 were at 65000 room nights in Jasper in the 'twenty one season, so we see already acceleration.

If the borders remains both Canadians are going to travel within the country.

And theyre going to experience and visit destinations that appeal to them and we have a lot of destinations and experiences that will appeal.

We're optimistic that there will be some movement on the border, but we think we can operate successfully within the attraction space and also within the hospitality and lodging space through the summer even if the order remains closed.

Okay, Okay very good.

Then in terms of the the acquisition.

The Golden coverage of traction can you expand a little bit more on the.

The strategic value of that asset your wire because of good within pursuit.

Sure.

What's important to remember us at 690 minutes from Vance.

Also the talent of Goldman sits in a circle surrounded by five national and provincial parks. It's on the main thoroughfare. The Cris crosses Canada of the Transcanada highway. Unlike the US Interstate system. There is primarily one route that takes you from west to east and east to West which traveled through Goldman.

It also has the community that as banks becomes.

Busier and more hotel properties of renovated there is a trickle down effect that drives us tour and travel business into Goldman as well and so we believe one the experience really is iconic unforgettable and inspiring and we use those words, but it's our first test because you know what when you see it and then Kim we integrated into itineraries in a variety of others.

Things.

So it's a great example of a tuck in within an existing and strong geography, and giving us the guest experience that we think is very additive to.

So our attraction base. The other thing that we really like about the Golden Skybridge US its first season will operating seasonally.

But into the future of will operate on a year round basis since Golden is quite a vibrant ski destination as well with limited operating ski and other time activities. So we believe that it's got great potential for year round business as well.

Okay. Okay very good very good switching gears to.

The GDS.

The thought of things and I appreciate all the all the commentary there in terms of of your outlook for the second half of this year.

Is your confidence for your overall view on what you guys might look like from the second half of this year improved versus versus 90 days ago, We would kind of big book.

The same kind of kind.

Kind of curious what's your what Youre seeing today in terms of the second half of the year of GDS versus the last time, we spoke.

That's how long a lot has happened in the last 90 days since we last spoke in.

As we get closer to these events you start seeing more of the pacing of the sale of floor space for some of the events.

So we're we feel good about how thats tracking for the back half of 2021, you'll also see just the relaxation of of.

Our easing some of the restrictions that are out there.

The Kentucky Derby can have.

The 50000 people in attendance.

The large sporting events are starting to take place.

Just before the call I read that Chicago auto will be taking place in the middle of July in Chicago.

So theres a lot of positive trends that have happened in the last 90 days.

How about us feeling very confident about the back half of the year.

Okay.

And so as you start to.

Restarts.

And somebody shows come back online can you just remind us some of the startup costs necessary to reactivate that business. If you will.

Yes, there are a lot of industries out there that are seeing.

Shortages of labor right now.

Is that something that debt.

Concern you at all about the manager that you're potentially seeing out there for you guys.

During the pandemic, we certainly cut back on overall SG&A.

So for the last year to make it through the pandemic. We're in a mode now where we're starting to increase our staff in preparation for the.

The back half of the year as you know.

Portion of our labor that we use at the show site in terms of the execution is all union labor and we feel confident that that labor will be there when the need arises for it. So we're building those plans too.

To be able to and be prepared for the events for coming in the back half of the year.

Joe I feel very good about our ability to do that I also think what's important is we've moved a little bit more of a.

Freelance our flexible model in terms of labor and that allows us to scale as the revenue comes back so.

We think thats the right approach that we should be taking during 2021, and we feel good about our level of preparation of events are coming back.

Okay excellent.

Housekeeping question I think for sure.

For Alan just in terms of Capex side of things can you remind us let me.

You said $20 million spend in the in the second quarter.

How much are you looking for the full year and how much of the apps.

We'll be categorized of maintenance capex.

Yeah, Tyler we haven't given guidance on the full year.

But the first half of March.

Italy weighted day, the flyover Las Vegas, So we had about 2019 capex in the first half of the flyover Las Vegas.

Okay.

Part of the $20 million of second quarter flyover Las Vegas carbon Scott Thanks, Joe.

Suggest the hotel.

As far as maintenance goes.

And the maintenance Capex.

The guidance to absolutely necessary capex.

On the pursuit of side.

It tended to be 6% of revenue guidance.

Yes, right now.

I can guide for that.

Okay.

The maintenance Capex is.

Is kept telling us.

Okay very good.

Thanks.

The last question.

For me just in terms of capital priorities moving forward.

Laid out a pretty attractive growth outlook. So many of the next few quarters with things getting getting better.

Any thoughts on strategically what might make sense. Besides just the M&A.

Especially on the Ges side of things perhaps.

Yes, we've been pretty clear in terms of our growth strategy.

We're going to continue to invest in pursuit of along the lines of refresh build buy obviously, David in his comments talked for a number of things that we're bringing online right now so those types of acquisitions or development projects are ones that youll see us continue to do in terms of Ges.

There are as we've talked about before.

Instead of <unk>.

Difficult time for the live events industry and as I mentioned in some of my comments some of our competitors.

How does the weather the storm very well.

There's opportunities to grow more organic than through through acquisition and thats kind of our strategy.

Strategy going forward the.

This is about 'twenty one.

Okay very helpful. I'll leave it there thank you for the detail.

Okay.

And your next question comes from current income from our Coast research.

Hi, This is Alex on for Kartik.

For you for taking our questions and our first question comes from the pursuit side and what type of demand are you seeing from residents within the Banff Jasper location and then if those locations remain closed to U S. Tourism for the summer are you planning on keeping the discount for the residents during the <unk>.

Each season or removing it.

And I'm, not sure, which discount you're referring to but I can give me a view to demand. So we're pacing for Jeff for right now 17% ahead of what was a quite a strong season in 2020.

And that is really.

Primarily all Canadians traveling theres, no international business and that growth mix.

And we expect that number is just going to improve.

We do have at all times, depending on the time of day and period of the year.

A more of a dynamic pricing curve to be honest and so if you've got a young family in one of visit and attraction early in the morning.

Generally a more favorable ticket price and if you want to come at two o'clock in the afternoon on a Saturday. So we do price dynamically and adjusted and we adjust any offers that we have based on the conditions within that particular market.

And also by type of visitor mix of product what else is packaged and so on so we spent a lot of time and energy around on the pricing side and we'll adjust according to what the demand is.

Okay great.

And then are you taking international bookings for the <unk> implications or is that of wait and see into the mid 'twenty one.

There are folks booking and theyre looking for obviously further in the year, whether that September October of August.

Dependent upon travel trends and what Theyre seeing actively Iceland is accelerating right now so.

We're seeing lots of movement.

Into the Alaska, Montana in Iceland, and then obviously the Canadian border has an impact on our western Canadian visitation, but those conditions are improving really daily and weekly.

Okay, great understood. Thank you.

Welcome.

Your next question comes from Steve O'hara from Sidoti <unk> Company.

Hi, good afternoon, Thanks for taking my question.

Just curious on the.

Maybe on the Ges side, how you see that business coming back I mean, you talk to the airlines.

The seem to think that the.

Business travel kind of comes back.

In the fall and then you see a much stronger resurgence in January when budgets get opened it back up again just kind of.

Is there the similar pent up demand for business as there is for leisure travel.

Yes, good question Steve.

Obviously, there's been a lot of of conversation about.

For the leisure travel, leading the recovery back and as David talked about in our notes we see that.

Happening right now what we see for Ges in the back half of the year, we do see the number of events that we were that we will produce being greater than what we traditionally would in a typical year. However, we do see them reduce the their size, we think that the business travelers.

We will ultimately return, but it'll be a gradual effect the kind of starts in.

At the beginning of the ended the second quarter beginning of the third quarter and goes through the end of the year. So.

We see the number of events greater but the actual size of those events.

Being lower than pre pandemic levels.

Okay and that kind of tough sales.

The next question.

You said youre, taking bookings for 2022.

I mean is there a.

A way to think about what that could look like in terms of.

I assume there will be some of the.

The same type of.

Scenario, where maybe you have.

More events, but smaller events.

Or maybe not I guess I'm just wondering for.

Conversations with the cut.

Customers clients, what are they saying of about 2022.

I think when you talk to the show organizers of exhibitions.

They're happy to go back to their normal.

The schedule throughout the year everything really was compressed or is being compressed in the back half of 2021 and so the.

The schedule I think will come back.

To pre pandemic levels.

Starting in 2022, what we are hearing from our corporate clients as of <unk>.

Strong interest and starting to plan events. Some are repeat event from some of our new events.

So we actually think that there is a fair fairly strong demand for.

The other events start taking place in 2022 and beyond and Thats. The work that we started with our client.

Okay.

Helpful and then.

And maybe on the just pursuit.

Im sorry going back to the Ges I think you said the.

Third quarter, you expected ges, the better cash flow or I Didnt I don't think you said cash flow positive is that.

Correct.

We expect that it would be cash flow positive.

Depending on.

The pandemic.

Sure.

But we do expect it to the cash flow path.

Great. Okay. That's helpful.

And then maybe just moving to pursuit.

Can you just remind me in terms of.

International and I guess I mean.

Other than the us and North America, how much of that market is typically international and.

Is that a governing factor in the near term on how well those properties can do or do you see pent up demand kind of making up for that.

Shortfall.

Yes, Steve. Thank you for that is the pent up demand is really powerful and we're seeing and as I mentioned in my remarks I mean.

We're seeing right now of lodging pace ahead in Alaska of 19 by 44%.

If you translate that also looking at Montana, we're tracking very strongly in Montana.

Call Center activity significantly ahead pacing $23, 524% ahead.

Jasper pacing strongly 17% ahead of this time last year and performance through 2020. So it is encouraging to see and pent up demand is quite strong and folks are deciding maybe this isn't the year to go in their African safari, but theyre focused on take going to Alaska and the booking pace has accelerated pretty dramatically again.

As I mentioned in the remarks, typically 350 400 bookings of we would be of typical number for Alaska. We're taking between 800 3500 bookings per week and that paid hasnt, let up.

International visitation and a typical years of up 51% and we don't segregate out the us obviously international visitation.

From from overseas is slowed because everyone is obviously paying attention, but if you look at Iceland, Iceland, if youre fully vaccinated you don't require any quarantine period. So delta is just resumed flights they have their first slate landing bigger of the daily within the next couple of weeks asked us United in the variety of others in Iceland.

Their ramps back up their flight. So we expect traffic from the UK and the us into Iceland will be quite strong and if Canada. The Canadian border Zone open we've planned and organized ourselves to obviously sustained the business but.

We don't have the Crystal ball I don't have any future view that I can speculate on other than we're seeing signs of strong enthusiasm and acceleration of vaccine delivery, which if you look at where the us once the beginning of February compared to where the US is at the end of March it's quite a marked difference. So we see that happening in Canada, and so we're encouraged by that.

Alright, Thank you very much for the time.

Thank you.

Your next question comes from Barry Haimes from the Sage asset management.

Thanks, so much.

Two questions first one.

Just thinking of that pursuit and in terms of rumors.

We were to look at.

Where they are now compared to where they were in 19.

<unk>.

Any feel for where rates are of that that's the first question.

Other than joy and encouragement.

It's actually pacing quite well.

Specifically revpar and ADR, so we're seeing growth across categories.

Right now for instance in glacier were trending up 21% from 19.

Significant growth in Alaska, as well strong performance and Josh for so we're seeing not only volume increases, but also strong revpar and ADR growth and given that accelerated demand. We've also been able to yield.

Significantly in key periods. So we move we studied price every single week and we move according to demand and we've been moving price pretty consistently over the last six seven weeks or so.

Great. Thanks, and then second question, a little bit more of a big picture one if we if we look to 'twenty two.

Not looking for guidance or forecast, but for.

Maybe even not even talking about a year, but assuming 'twenty two or 'twenty three whatever is that from normal.

What's the right way to think about the earnings potential of.

The business because you've had some cost cuts solution, yes, we've had sort of traction additions.

Pursue so including.

Anything you could point us to us investors.

In terms of how we should be thinking about earnings power.

In a normal year versus where we were 19 months, let's say.

Well I think if we compare.

The earnings day, 2019 pre pandemic too.

There will be at full recovery of that kind of.

<unk> for when that happens because the.

Of the businesses are coming back debt.

At different paces, I mean, clearly will be better off we've seen.

We believe there's margin opportunity within the Ges business on kind of the existing base of revenue just based on sort of a lot of the transformation work that we did over the last 12 months.

And the pursuit team has brought on new attractions.

Over the last 12 months of we believe there as well.

You'll continue that strength of the earning power.

So we're very bullish and optimistic about.

What this business looks like when there is a full recovery of it clearly better off from where we were in 2019.

Okay. Thanks, so much.

Okay give us specifics around what that looks like entirely but we're very optimistic and bullish about our future.

Great. Thanks, so much.

Thanks Barry.

Most of our last question at this time I will turn the call back over to the pre interest for closing remarks.

Thanks, Mike Thanks, everybody for your questions and your interest in VR and we look forward to speaking with you again next quarter. Thanks, everybody Bye bye.

This concludes today's conference call. Thank you for participating you may now disconnect.

During the year.

Sure.

Okay.