Q2 2022 Viad Corp Earnings Call
Is substantially better than our target of 20% plus flow through due appart to the revenue recovery outpacing our rehiring efforts.
As I'll discuss further when covering our outlook. We anticipate flow-through will be lower in the back half of this year.
viriral second quarter revenue increased 77.5 million, with an increase in adjusted EBITDA of 21.8 million as compared to the 2021 second quarter.
toarrow continues to win new logos and benefit from increased client spend.
Ke exhibition. Second quarter revenue increased 141.5 million, with an increase in adjusted EBITDA of 34.9 million as compared to the 2021 second quarter.
G exhibitions realized its fourth consecutive quarter of same-show revenue improvements, with revenue from U's events that we produced reaching 87% of prepandemic levels on average.
Next I'll quickly cover some balance sheet and cash flow items before turning the call over to David for pursuit updates.
We ended the second quarter with total liquidity of approximately 127 million, comprised to a 55 million in cash and 72 million of capacity available on our revolving credit facility.
Our cash flow from operations during the quarter was an inflow of approximately $26 million, which was better than our prior guidance, primarily due to the faster-than-expected rebound of event activity at Ts.
Our capital expenditures totaled about $19 million for the quarter and were mainly at pursuit, including growth CapEx for the new Forest Park hotel in Jasper.
In early April , we completed the acquisition of a Glacier raft company for approximately $25 million net of cash acquired, which we funded with $15 million of revolver borrowings and cash on hand.
At June thirtye. Our debt total approximately 492 million, including 15 million drawn on our revolver, 397 million on our term loan. B financing lease obligations of approximately $74 million, construction loan to help fund the development of the forest Park hotel and other debt of approximately seven million.
Additional details can be found in the appendix of our earnings presentation.
And now I'd like to turn the call over to David to discuss what's happening across pursuit David.
Thanks Ellen, and thank you all for joining us. Peak season operations are in full swing across the pursuit world and we're thrilled to be operating in an environment that's mostly free from COVID-driven restrictions.
As Ellen mentioned, our adjusted EBITDA finished below our previously issued second quarter guidance, which we largely attribute to a five -week period of exceptionally poor weather in our vanced Jasper and Glacier Park operating geographies.
This was the same weather pattern that caused flooding enclosures in yellowstone national Park and other parts of the West. Thankfully, both our teams and destinations suffered no significant damage other than three solid weeks of heavy rain and snow.
Even with the poor weather conditions, we delivered significant year-over-year revenue and adjusted EBITDA growth and strong improvement in our attractions, visitation and lodging performance metrics.
As shown on Page 11 of our earnings called back. Our second quarter revenue reached a new record of 77.6 million, which is up 41.3 million or 114% year-over-year.
Relative to prepandemic twentthousand and 19. second quarter revenue increased 22.2 million or 40%.
I'm very happy with this strong growth, which is the result of new lodges and attractions in the pursuit portfolio, together with increased revenue from experiences that were part of pursuit prior to 2019 and as I'll touch on further as I review our performance and outlook. These great results still do not reflect the full future potential of our experiences.
So first, Turning to our attractions, on Page 12, we saw second quarter ticket revenue grow by approximately 200% as compared to 2021 and by 27% compared to two thousand and nineteen and.
We hosted about 743 thousand attraction visitors, as compared to 204 thousand in 2021 and 651 thousand in two thousand and nineteen and.
On a same-store basis, excluding those attractions that we opened or acquired in 2019 or later attractions. Visitors reached 81% of the prepandemic 2019 second quarter, which is a significant improvement from just twotwenty-one percent last year.
pursuits, bam-based attractions, the BAM gondola and Lake minamwa crews, and our keyi fyors well watching crews in Sewer Alaska delivered particularly strong results, with guest visitation and total attraction revenue exceeding both prior year and prepande.mic two thousand and nineteen and.
Same-store attraction visits lagged the same period in 2019 at the Columbia, icefield Glacier skywalk, marine Lake and flyvover, Canada. These attractions are more dependent on long-haul visitation from the Asia Pacific markets which unfortunately, are still locked down due to the COVID-19 pandemic.
The five new attractions we've opened or required since 2019 posted approximately 215 thousand visitors during the second quarter, with very strong guest reviews.
While visitation has yet to achieve its full potential, we are encouraged to watch the performance of these recent investments accelerate as destination visitors return, guest awareness builds and our market penetration strategies take hold.
skylagoon and Iceland delivered a quarter-over-quarter dek visitation increase of 48% and fly of our Iceland delivered an increase of 26% versus the first quarter.
While we expect overall travelers to Iceland will remain below 2019 levels this summer, our visitation continues to trend in a positive direction and we're well positioned for an even stronger third quarter at both of these attractions.
As Li or Las Vegas. Our gth trajectory is taking longer than I'd like, but it's moving in the right direction.
visitation increased 13% from the prior quarter and continues to build momentum.
Average daily visits in July were up 20% from the month of June .
Reviews for the experience are very strong and we're gaining ground within the major distribution networks like Vegas com.
And finally we're up and running at our new seasonal attractions: the Golden skybridge and Golden British Columbia and the Glacier rafco and West Glacier Montana.
Both locations offer high-value bucket list experiences, and we're very excited to see what this summer holds for both.
All right, So now let's switch over to lodging performance. On Page 13, our second quarter rooms revenue grew by 81% as compared to two 20, twent thousand and 21 and by 63% compared to two thousand and nineteen, and.
The year-over-year growth was largely due to ER higher occupancy, while the growth from 2019 was due to our expanded portfolio of lodging properties.
Through acquisitions made since 2019 including the seven hotels within Mountain Park lodges. We increased the number of room nights available during the second quarter by 62% from about 96 thousand in 2019 to approximately 166 thousand. In 2020. Two.
Overall occupancy during the second quarter returned to the prepandemic 2019 level of 68%, with an increase in ADR.
And of the 17 hotels that we owned and operated prior to 2019, 16 delivered second quarter revenue and excess of 2019 levels, a strong indication of our ongoing focus on improving the guest experience, the resiliency of our business model and continued pricing power.
Our seven joasper base hotels acquired in June of 2019, also performed exceptionally well, with second quarter occupancy up 100%, year-over-year ad up 17% and RevPAR increasing a healthy 100 and thirty-five percent.
We're encouraged with these results as the reflective of the power of pursuit bucketlist experiences and the returning perennial guest demand for our iconic locations.
Looking ahead, we have a positive outlook for the second half of 2022, and now I'd like to share some insight on our view for the balance of the year.
With the all important third quarter underway, we're very pleased with how July has performed thus far. Through 24 days attraction ticket revenue is up twotwenty-one percent from 2019 and 74% from 2021.
On a same-store basis. Ticketing revenue is down 5% from 2019 and up 64% from 2021.
July , month of date, lodging performance is strong as well, with same-store revenue having increased 5% from 2019 and 20% from 2021.
We continue to anticipate strong guest demand for purits collection of experiences and we remain focused on our key business drivers. So financial growth fueled by the return of travel are refresh, build by investments, strong guest satisfaction and team member engagement.
Lodging pace for full year 2022 remains very strong across all geographies, as we're showing on Page 14: rooms revenue is pacing well ahead of 2021 and prepandemic 2019 across all geographies on a same-store basis.
And this reflects both strong occupancy and rate performance.
In BAM and Jasper we're benefiting from increased U's visitation following the CDC's decision to drop cot testing requirements for entry into the United States, easing two and a half years of travel restrictions.
We're also closely watching border restrictions for any negative impact from Canada's recent decision to reinstitute random testing for guests arriving to Canada by air.
In the Glacier Park collection and in Alaska we're pacing for record seasons with same-store rooms revenue up 25% and 19% respectively, from two thousand and 19 the.
Turning to our attractions, we anticipate the 2022 total attraction visits will double the one point five million visits we hosted during two and thousand and twenty-one.
This will put our total attraction visitors above 2019, but does not reflect the full potential of these high-margin experiences.
With our tour and travel partners not yet traveling from Asia. Pacific full year attractions visitation is expected to be between 10% and 20% behind 2019 on a same-store basis, as these long-haul destination visitors remain at home due to COVID-19 restrictions.
Page 15 illustrates the guest-mixed shift that we've seen relative to prepandemic. Historically, visitors are maasia Pacific, have been heavy consumers of our high-margin attractions across the Canadian West, as they all travel on set and inclusive itineraries.
And while they're not yet able to travel to earn, travel partners from these markets are contracting at historical levels for the upcoming season.
This means that we have growth upside in 2023 and beyond, as visitation from these markets returns to prepandemic levels and our new attractions continue to ramp.
We anticipate that full year 2022 adjusted EBITDA margin will increase from the two 20% we saw in the second quarter and materially from 2021 , but will remain below two thousand and nineteen levels.
Looking beyond 22, our models anticipate a return to prepandemic profitability levels as international guest volume increases and global travel trade visitation continues to rebound, while guest awareness in the market penetration strategies that are newer experiences take hold.
The economic power of our attractions is pretty formidable as cost to operator largely fixed once the attractionsion is open for the season. Strong guest volumes flow through attractions at very high margin levels and have a positive impact on pursuits overall margin.
The return of Asia-Pacific visitation to our attractions in the seasons to com will have a significant positive impact on both revenue and return to historical margins.
Before closing just last quarter, I mentioned that we identified staffing is the single biggest success factor for the 2022 season and I'm pleased to say that our teams have done a great job of seasonal recruitment.
The benefits of this recruiting success are twofold. First, it goes miles in ensuring that our team members are supported and drives up a high high, high level of team member engagement, a metric that we are very focused on.
Second strong key member engagement and appropriate staffing levels are critical to delivering a high level of guest satisfaction.
So I'm very proud of our teams and leaders across the pursuit world and grateful for all that they do, and I look forward to reporting a strong second half of 2022. in the quarters ahead, Steve over to you.
Thanks David. And now I'd like to give more insight into the second quarter performance at G exhibitions and spirro, starting on Page 17 of the earnings presentation.
As I mentioned at the beginning of the call, both exhibitions and spyro significantly outperformed our prior guidance range due to stronger growth of existing shows in clients as well as new business wins in the quarter.
The second quarter was the largest revenue quarter for G exhibition since the pandemic began and provided an operational test after rebuilding this business.
I'm proud to say that the business exceed our expectations in financial performance, operational excellence and client satisfaction.
G exhibition delivered a remarkable hundred and $55 million in revenue and $19.4 million in EBITDA during the second quarter.
On a same show basis. Our revenue from U's exhibitions was 87% of its 2019 prepandemic level for the second quarter, as shown on Page 18, up from 73% in the first quarter of 2022 and better than our expectation of approximately 75% and.
The second quarter marks the fourth consecutive quarter of increasing same-show growth in the? U's since the recovery started in the third quarter of 2021 and.
This U's same show. Metric compares trade shows that occurred in the same City for both occurrences and represented between 30% - 50% of the total exhibitions revenue during each of the last four quarters.
G exhibitions also benefited from winning approximately $11 million of short-term bookings. These are shows that were contracted and produced in the second quarter, as well as some European shows that moved date into the second quarter from later in the year.
The trajectory of the same show. Growth over the past four quarters and the new wins in the quarter point to a strong, healthy recovery of our business.
I'm particularly pleased to report that GX hibititions was able to generate higher EBITDA margin on significantly less revenue than our prepandemic performance.
During the first half of 2022, GF exhibition delivered an 8% EBITDA margin on $266 million in revenue and had a 22% flow through to adjusted EBITDA on incremental revenue compared to the first half of 2021. As seen on the Page 19 of the earnings presentation, this performance is the direct result of our transformation, which included eliminating approximately $1 million in fixed costs and significantly reducing our overall cost structure.
Now let me share some sight insights into spira's second quarter and the great work that we did for our corporate clients. As a reminder, spirro is our experiential marketing agency that we rebranded in the first quarter of this year and represented approximately 30% of G's 2019 total revenue.
Spiral already has a strong client roster, including some of the largest pharmaceutical, aerospace and defense industrial, fintech and technology companies around the world. During the quarter, spiral delivered $89.4 million in revenue and $15.8 million in EBITDA, as existing client spending exceed our expectation and new client started their marketing projects with spiral.
spya's existing client' marketing spend was approximately 90% of their 2019 spending levels. On a same event, same client basis.
This was higher than the 80% that we had expected, based on a client survey that we conducted at the beginning of the year. As I mentioned on the prior earnings call, the spyire team has been focused on building out the critical capabilities needed to compete in the large and growing experiential marketing industry. These new capabilities have led to new wins. Since the beginning of 2022, Spy has won a total of twotwenty-three new clients across North America and Europe , and has also expanded our programs with existing clients.
These new wins and growth of our existing clients generated incremental revenue in the second quarter. A great example of growing and cross-selling our existing clients on a global scale is the work that we did this quarter for JP Morgan.
Based on our newer capabilities, the spiral team expanded our scope of work with JP Morgan to include the connected car experience tour which spiral will be managing in both Europe and the U? S.
The connected car experience is a consumer experience concept that spiral created and is designed to highlight the tremendous possibilities that exist when JP Morgan's visionary financial technology is combined with the current automotive connectivity to deliver a rich and robust suite of consumer services in a manner that will be as simple as Turning on your carss Radio again. This is a great example of the work that we can do at spirro for our clients.
Looking ahead to the remainder of 2022, our guidance for G reflects our prior assumption that exhibitions will remain at or above 75% of their prepandemic revenue, but will not have a full recovery this year.
As a good proxy for the remainder of the year. During the last earnings call I mentioned our largest show in the third quarter will be imts, or the international manufacturing technology show in Chicago.
Today imts has sold approximately 85% of the space compared to their most recent show in two thousand and eighteen, and.
Similarly, spirro predicts corporate client spending will be at or above 80% of prepandemic levels for Q3 and Q4 of 2022. And now I'd like to turn the call over to Ellen to discuss our financial outlook in more detail Ellen.
Thanks Steve. We continue to expect very strong year-over-year growth from both pursue and ES and are pleased to be increasing our full year guidance for consolidated adjusted EBITDA due to ges to stronger than previously expected performance during the second quarter, partially offset by a reduced full year outlook at pursuit. As shown on Page 21. we expect pursuits adjusted EBITDA for a 2022 full year to be in the range of 70 to $8 million.
Which is down from our prior guidance of 80 to Ninety million.
The reduction is primarily due to lower-than-expected results during the second quarter from inclement weather and our expectation that flyber Las Vegas visits will experience a slower than previously anticipated ramping this year.
As David discussed fllyver Las Vegas's gaining momentum. It is well positioned to succeed with its very strong guest reviews, excellent location on the Las Vegas strip and a talented team with deep experience running successful entertainment experiences in the Las Vegas market.
To the peak third quarter. We expect to pursuits adjusted EBITDA to be in the range of 74 to 82 million, as compared to 59.6 million in Q3 2021 and 75.1 million in Q3 two thousand and nineteen.
Our outlook for pursuit assumes that our? U's same-store experiences will once again post revenue above prepandemic levels from strong leisure travel demand and our continued investments in the guest experience.
Additionally, our Canadian same-store experiences will see significant but not full recovery relative to 2019, as certain long-haul markets are slower to resume international travel.
Our three new attractions that we opened in 2021 will have a full season of operations this year and continue to ramp as guest awareness builds and long-haul leisure travel demand increases.
We will also benefit from the additions of the recently acquired Glacier raft company and the opening of the forest Park hotel this summer.
We expect pursuits adjusted EBITDA margin in 2022 will be in the mid twenty's, which is substantially better than 2021, and we continue to expect to return to the mid-thirty's as and when long-haul international leisure travel fully recovers. As David discussed, these visitors have historically been heavy consumers of our high margin attractions.
Now turning to G on Page twenty two.
We expect tses's adjusted EBITDA for the 2022 full year to be in the range of 50 to $6 million.
This is up from our prior guidance of 25 to thirty-five million.
Based on the stronger-than-expected performance of our second quarter events and current expectations for the balance of this year, we feel comfortable increasing our full year range for G by $25 million.
Our assumptions underpinning our guidance remain a bit cautious, given the dynamic operating environment that we continue to navigate, as concerns about the impact from covidt restrictions are receiing. We are facing increased economic uncertainties that make forecasting challenging, especially beyond the current quarter. Additionally, we continue to face margin headwinds in the form of higher inflation, transportation expense and supply chain issues.
The G team has done a remarkable job mitigating these challenges through the first half of the year.
And ll continue to find creative solutions to help offset rising costs for the remainder of the year.
For the third quarter, we expect kees's adjusted EBITDA to be in the range of six to $11 million, as compared to a loss of four point two million in Q3 2021 and a loss of two point eight million in Q3 two thousand and nineteen and.
The improvement versus 2021 largely reflects higher revenue, partially offset by increased staffing levels to support the revenue recovery and some of the cost. What headwinds I just mentioned.
The improvement versus 2019 largely reflects favorable share rotation, including ints, as well as G's leaner cost structure.
Next I'll cover cash flow outlook before turning it back to Steve for concluding remarks.
For the third quarter, we currently expect an operating cash inflow somewhere in the range of 70 to $75 million.
And capital expenditures of approximately $3 million, including growth CapEx for fly over Chicago, a new Mountain coaster experienced at the gold of skybridge and completion of the new Forest Park hotel build.
For the full year, we expect capital expenditures of approximately $8 million to be funded with cash flows from operations.
We will continue to prudently invest in attractive growth projects at pursuit, while maintaining ample liquidity.
And now I'll turn the call back over to Steve.
Thank you, selen. I'm encouraged by our strong first half performance and a continued recovery in leisure, travel at pursuit and live event activity at G as we head into a busy second half of the year. We're well positioned for continued growth with pens-up demand for our industries on both sides of the business, new world-class experiences at pursuit and a stronger, more profitable G.
Looking beyond 2022, I'm very excited about the future earning potential.
The actions we have taken during the last few years to grow pursuits, collection of attraction and lodges, and to transform G's cost structure and focus on higher-margin clients and services should propel our EBITDA well above 2019 levels. As pandemic headwind subside.
We remain committed to our strategy to create extraordinary experiences and strong returns for our shareholders to pursuit. We continue to evaluate opportunities to grow the business through our proven refresh build-buy strategy.
For GPs, we will build on the progress we've made to date to improve the margin profile and resume generating strong cash flow through our more flexible cost structure and focus on higher-margin clients and services.
I want to thank our hard-working, dedicated employees and our shareholders for your continued support in vyond, and with that we'll open up the call for questions.
At this time. I'd like to remind everyone: in order to ask a question, press star in the number one on your telephone. keypad will pause for a moment just to compile a QA roster.
Your first question comes from the line of Tyler Batory, from Oppenheimer. Your line is open.
Good afternoon. Thanks for taking my questions. Appreciate all the details thus far here. Your first one on the gyes side of things on the margin, really impressive this quarter. Nice to see the progress there and some of the initiatiative that you talked about really coming through.
Are these profitability levels, these margin levels, sustainable at these levels of revenue? I mean, were there any abnormally profitable shows in Q2 or anything that was kind of one time that was perhaps a tailwind that benefited margin in the quarter.
Yes thanks. So for the question. First off, if you look historically, the first half of our year is usually stronger than the second half, based on revenue mix within within the, within the quarters. So there is a historic trend of strength and kind of margin in the first half relative to the second half. But what I can say, I'm very proud of kind of what we accomplished in the first half and as revenue continues to recover in the industry and we continue to grow, you know, I think we can improve upon where we, where we ended up so strong first half, some of the margins are supported by stronger events in the first half of the year.
Okay okay. And then, in terms of your outlook, you as your view on the second half of the year G, and really on the exhibition side of things, as your outlook on the second half of the year, change much from a couple of months ago. It does sound like you know the commentary. Everything that you're talking about is quite positive. At the same time, you know it also looks like your expectations in terms of same show revenue you are pretty consistent with you, which we're talking about previously. So it just trying to connect the Dot, So tospeak, on those two factors or ative sense of of your outlook for how the second half of the year shting out.
Yes it's a good question and you know our outlook for the next two quarters has been pretty consistent with what we've seen before. You know, in the script I called out one of our larger events, I mtss, and that's tracking it from a square footage perspective, about 85% of where it was prepandemic, and we we expect roughly that level of performance for the balance of the year which is in line with what we had thought. I think the big surprise for us, Taylor was in. Our Tyler was in the second quarter just.
We didn't think that the events would come back as quickly as they did, and obviously we were pleasantly surprised with how quickly they recovered. There is still a tremendous amount of variability.
Within the performance or the growth over prepandemic levels between the show. So even at the 87% in the second quarter there was a lot of variability between the shows and I expect that to continue for the balance of the year.
ok okay. So gears of the pursuit side of things, I just want to be crystal clear that I understand the guidance there. Know you, lowered by one million at the midpoints Q? Q was three million in change, loer than you were thinking. So So in terms of the delta here for the second half of the year, when you called out fly over Las Vegas, I mean there are any other factors that are causing the lored, the lowered outlook, come sure you know there's extra cost, inflation or anything else that's going on in the business different than what you were anticipating.
Yeah that's a good question, the.
ok no, the main driver tylot.
Is looking at the second quarter, the miss in the second quarter and the specific slower ramp for the Las Vegas flyover. And I don't know David, if you want to comment more on.
When you're seeing for the balance of the year.
Well I think you know it's. It's one obviously things an impact from our Asia Pacific visitors not being able to travel and so, you know, at its peak Asia Pacific, you know, 2008- 19, that's- that's 45 thousand visitors that are staying home this year because of the restrictions. So we know those visitors are coming back, it's just they're not coming back this season. So that's really the reflection of where we are from a cost standpoint. We've seen increases in fuel and various other things in supply chain, but we've been able to do things like fuel charges and be aggressive on pricing in a variety of other things. So you know guess, satisfaction remains pretty high and we're delivering great products and charging a fair price for it.
ok great, that's all for me. I'll Le it there, Thank you.
Big haveon.
Your next question comes from the line of ktek Meta from North Coast research. Your line is open.
biggood evening. Just I know things on a pyroide look good as looks good, but have you had any conversations with companies that might be getting scared of the potential slowdown in the economy and, as a result, maybe pulling back, and that is an impact. twent-two but.
These name potentially impacts 2020: -th.re: E.
Yeah you know what I see, or cur off, car I haven't seen any cancellations or postponeents based on, you know, any kind of economic downturn or a recessionary going back, and when I look at our larger events- balance of the year they are, they continue to grow in terms of the number of exhiitors attending those's events, and so I haven't seen any signs of that activity for the balance of the year and I, to be honest, I haven't looked dire. We don't have an enough data yet about the 2023 events to say what they look like in terms of their size or scale. So what I think say right now is: I don't see any impact in the next, you know, six months or so.
In David on the pursuit side, obviously you're able to get some price increases because of demand and inflation in the morning. Do you anticipate that those price increases, especially on the lodging side and attraction side, are sustainable?
Yes it's interesting. If you've paid attention to some other companies that have reported earnings, you see some some aita about that. I think we're in a very different position.
If you look as an example cartec like Mountain Park lodges that we acquired in two thousand and nineteen and.
The mepark lologges had commitments for the 20, 20 one and 20 two season with tour and travel partners all around the world as those commitment, then we're in a great position and we see quite strong enthusiasm for 20- three, 20 four and 20 five seasons, based on travel trade partners recovering and their guests wanting to travel, and so as the mix returns to more traditional we we see an opportunity. We've been able to drive some pretty significant increases from a price standpoint and we believe we're going to be able to continue to do that quite effectively into the future, and we just feel really good about that. Refresh Bill by is a great example of taking a property, making it nice, are making the guest experience better and then ultimately charging more for a much better product. So we're- I think we-'re- a little different than business travel or, you know, super competitive City hotels where there's one on every block we have.
bucketlist destinations that have this perennial demand and we control large swaths of that inventory. That gives us, I think, pricing power. That's unique.
And then just one last question David, on pursued. You talked about about 45 thousand visitors coming from AP, but approately what percentage of revenue would that be pursued? So if everybody came back in 2023? I'm trying to figure out what the potential is for pursued.
Yeah I think one I would be a little cautious with the rate of return that I don't think everything's coming back in twentthousand and 23. I think it gives us tailwinds for the coming seasons. For 23, for 24 in 25, because certain countries are going to accelerate more quickly in other countries, you know are going to be a little bit behind the curve depending how they're dealing with their COVID-19 strategies. So it'll be impactful. I'm not sure havethe revenue number of the top of my but'. I'm happy to dig into that and follow up with you.
Thank you very much. I really appreciate it.
Your next question comes from the line of brrian Mayor from B Riley securities.
Your line is open.
Good afternoon and thanks for all that information so far. Very helpful.
On G and the strength there in Tyler, I think, touched upon it a little bit- or when we think about the seasonality of the business and the margins on top of that and thinking about the margin improvement in two Q would. Would we be safe to maybe elevate our margin expectation across the four quarters, deeping with some less ofve seasonality that we've seen? There are models over the past few years.
I think that it's a good question right, and what I would say is that we've talked about total G, seting a target of 8% EBITDA margin. As revenue recovers, you'll see that seasonality or cyclicality in our margins from quarter-to-quarter.
That we've had historically, as I mentioned before, the first half relative to the second half, but on a full year basis. As revenue recovers, we should expect to see margins improve over their prepandemic level. That then, really is the results of everything we did during the pandemic and adjusting our cost structure.
Okay So definitively, several more percentage points of margin on an annual basis.
At some point.
Going our here is kind of what I'm hearing.
Yes what I would say is there's margin improvement over where we are now and it really depends on revenue recovery. I mean, even with the strength of the second quarter, it was smaller, significantly smaller than what we had seen- pretty pandemic for the second quarter. So from a revenue perspective, I'm very happy with the margins we produced in the quarter and I think, as revenue recoveries, you'll see the margins continue to climb based on the work that we did.
And I know you don't.
Guide right. Pushing the envelope here a little bit will guide more than you put in in the PowerPoint. But would you expect to see that unfold maybe by year-end 2024 or sooner or later than that?
As Ellen mentioned our comments we, you know, coming out of the health care and the pandemic, we're faced with another certainty, which is what's going to happen to the overall economy. Brian , at this point of be premature for us to talk about know 2023 or 2024, our focus is really on executing the balance of the year.
Okay that's fair. And then a G yet.
Given the strength of the business coming back, what percentage of that would you say was repeat business from kind of prepandemic customers that you dealt with and maybe percentage roughly was new customers to gyes?
Well you know, I think, as we've talked about before, the exhibition side of the business benefits from having multiyear contracts with their clients, So that tends to be a heavy repeat business and in a high renewal rate on this contracts. Additionally, spiral has some very long standing client relationships and therefore you know the total revenue for GS on an annual basis, you know I it's probably 60 to 70% renewed or existing clients and the rest is is new clients.
Very and then last for me, I think, like Tyler and mentioned C IC. You know the pursuit, even contribution from the new new new editions know million dollars and you've mentioned a couple of times for the Las Vegas fly over. Is there anything that that's happened? Las Vegas fly over, the nine or 10 months it's been open? That get you to rethink what you are planning to do in Chicago or Toronto from a you know development or opening Endpoint.
Yeah thanks for an now.
Go ahead, steep do.
A couple of things. 1: for Las Vegas. Think of the timeline that we were in right, if you recall, September of two thousand and 20: one of the world was still. Folks were traveling, but definitely COVID-19 was still rearing its thatgwe had. We were ready to open, we openened and we knew that the period of time would be challenging. Then obviously, through the winter, with all Macron and how visitation was affected, and I think that the primary effect on Las Vegas was that just simply getting going in the distribution networks took a lot of time, not because people didn't support the ataction, because the guest ratings are very high and the experience is phenomenal. It was more just getting in front of folks to be able to get those distribution networks moving. So that's the first thing. So if you look at Vegas, do com or go City or a variety of these other very strong distribution platforms within the Las Vegas market in the attraction space, all of those are coming online. We're 40% ahead of maiz visits in July , you know we're 20% ahead of June vis in July and those numbers are continuing to build and we feel strongly that they're going to perform. We've had the major casinos in their distribution networks visit play over as veg and the reactions been very positive and so, while the rat is taking longer, we're world's coming out of the global pandemic and we feel good about it. You know one of the reasons we love attractionsis: their bilt for volume.
And that just means that if you're operating a fly over, you know your costs are basically said if you have 500 guests or if you have 2000 guests, and history has shown us in Vancouver and an Iceland which are both having phenomenal sumers, that the thing is going to continue to build and we're just getting the distribution mix right. one of the benefits of Chicago is that navy pier is a very consolidated destination where everyone works together: the same ticketing platforms, there's some terrific cooperation between the various companies that are there. Whether it's the children's museum or the wheel or hornblow or the pier itself. It's a bunch of great companies that work together to drive visitation to navy per. So we feel confident and and if any of the lessons we've learned is, you just have to keep pushing and keep pushing again and har, der and harder. But we're quite confident. If you saw that all Street Journal article today, you know, on the Vegas results. So Vegas is booming and we think we're going to boom right along with it, and we're just working on fine tuning the distribution and have confident that Vegas is going to be a strong performer.
Thanks and that SEG way nicely to my last question, and I'll keep it tight.
Volume and Sky lagoon. I know many of us haven't had the opportunity to go over to sky 'sprobably a idea, an analyst day there, I would think. But can you talk a little bit about ability to you know takepe market share from, from blue lagoon and maybe some of the dynamics of pricing versus expenses there? Is it similar to maybe what we're seeing elsewhere in know kind of regional attractions?
Yeah I would say just a couple of things. So first, with sky lagoon, we'reinredibly happy with how it's performing and how awareness for the experience has grown, and we're consistently either right on forecast are slightly ahead of forecast through, you know, the peak time of the summer, So visitation increased 48% quarter over quarter and our guest reviews are super strong at four point seven out of five the difference I think skylagoon is, is people often compare and blue lagoon, blue lagoon in Iceland, is a bit like the iffe power in Paris. Folks are going to go and they're going to see it. Where we do really well is that the end of your day, when you don't necessarily want to travel a longer distance. We're a three kilometer cabareright away and you add it on to the end of your day and so we see visitation. You know, all the way through the daypattern. It's not just in the prary part of the day, butit's into the evening and so on. So Iceland is recovering well. It's still about 90% of the 20- 19 levels, but margin performance wise and just how the business is performing in skylagoon is phenomenal. And I'm happy to host, you know, an Investor Day at sskylagoon. That would be a ton fun.
Thank you very much, appreciate it.
stbt.
And your final question comes from Barry haynes, from sage asked asset management. Your line is open.
Thanks so much for taking my question. I want to had a couple follow-up financial questions. You gave the your CapEx and free cash flow for the third quarter, but I wonder if you have similar numbers either for the fourth quarter or for the year which is might want to talk about it and I rightite that exequation: AFT acquisition: you were positive free cash flow in the second quarter thanks.
Experience So for the full year CapEx is about or anticipating eight million and for free cash flow I would say, if you take EBIT to minus our interest expense payments, I mean that will get an approximate operating cash flow number. So you can use that as aapproximate with the second question.
Second quarter. Will your free cash flow posit? Has ex Glacier app acquisition?
Yes.
Great Thank you so much.
Thank you V.
There are no further questions at this time. Steve, I turn the call back over to you for closing remarks.
allright, Thank you very much. Thanks, everybody for joining us on the call and we look forward to giving you an update at the end of the third quarter. Thanks so much.
This concludes today's conference call. You may now disconnect.