Q4 2022 Onespaworld Holdings Ltd Earnings Call
Yeah.
Good day and welcome to the one star World fourth quarter 2022 earnings call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions to ask.
A question you May press Star then one on a touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Allison Malkin of ICR. Please go ahead.
Thank you good morning, and welcome to lifestyle World fourth quarter and fiscal year 2022 earnings call and webcast before we begin I'd like to remind me that certain statements and information made available on today's call and webcast may be deemed to constitute forward looking statements. These forward looking.
Statements reflect our judgment and analysis only as of today and actual results may differ materially from current expectations based on a number of factors affecting our business. Accordingly, you should not place undue reliance on these forward looking statements.
For a more thorough discussion of the risks and uncertainties associated with the forward looking statements to be made in this conference call and webcast. We refer you to the disclaimer regarding forward looking statements that is included in our fourth quarter 2022 earnings release, which was furnished to the SEC.
First of all on form 8-K.
We do not undertake any obligation to update or alter any forward looking statements, whether as a result of new information future events or otherwise. In addition, the company may refer to certain adjusted non-GAAP metrics on this call and explanation of these metrics can be found.
In our earnings release issued earlier this morning.
Joining me today are Leonard Flaxman, Executive Chairman, Chief Executive Officer, and President and Stephen Lazarus, Chief Financial Officer, and Chief Operating Officer, Leonard will begin with a review of our fourth quarter and fiscal year 2022 performance and provide an update on our operations and our.
Our key priority then Steven will provide more details on the financials and fiscal year 2023 guidance I would now like to turn the call over to Leonard.
Thank you Alison good morning, and welcome to one spa, well fourth quarter and fiscal year 2022 results conference call.
I'm very pleased to report an outstanding finish to an excellent year of growth.
Fourth quarter saw a highest quality revenue income from operations and adjusted EBITDA delivery in our history.
These results clearly demonstrate that the strategies, we implemented during the pandemic.
Not only led to a successful return to normal service, but importantly raised our capabilities to deliver even greater levels of performance in the future.
I'm proud of our team is their combined efforts executed a stellar returned to service that including placing over 5000 staff onboard cruise ships embarking on 6661 voyages.
Conducting 1115 management visits just ships import.
Operating 48 destination resort health and wellness centers and continuing to provide innovation in our products and services.
All of this contributed to our achievement of double digit increases across key operating metrics.
Fourth quarter and fiscal 2022 results.
Once again attests to our company's unique positioning and capabilities as the preeminent operator of health and wellness centers at sea and on land, which drives extraordinary value for our cruise line and resort partners.
Turning to the highlights of the quarter total revenues were $168.9 billion, increasing 19, 7% from $85 $7 million in the fourth quarter of 2021.
Growth reflects contributions from health and wellness centers that reopened on 177 ships that resumed operations compared to 118 ships at year end last year and the contribution from 48 destination resort spas that were open and operating as of December 31st.
Income from operations increased $14.7 million to $10 $7 million compared to a loss from operations of $4 million in the fourth quarter of 2021.
And adjusted EBITDA was $27 million, an improvement of $15 $9 million from adjusted EBITDA of $4 8 million in the fourth quarter of 2020 one.
For the year total revenues increased 279% to $546 $3 million compared to $144 million in fiscal year 2021.
Income from operations increased $67 $2 million to $15 $1 million compared to a loss from operations of 52 million.
Dollars in fiscal year 2021.
Adjusted EBITDA increased 16 $9.3 million to $54 million compared to negative $18 $9 million in fiscal year, 'twenty or 'twenty one.
Unlevered after tax free cash flow increased to 45 point and $1 million compared to negative $22 million in fiscal year 2021 and we ended the quarter with total liquidity of $53.3 million.
Oh flawless returned to service continued to fourth quarter source commenced service on board two new ship boats.
At quarter end, we had health and wellness centers onboard 179 ships of which 177 had resumed voyages as of quarter end.
This compares to 172 ships atrazine voyages at the end of the third quarter of 2022.
And versus the 118 ships that presumed voyages by the end of Q4 2021.
We continue to see record demand by cruise ship guests for our services.
While load factors onboard cruise ships remain below historical in 2019 levels.
We were very pleased to see continued high demand for our services key operating metrics during the fourth quarter of 2022 compared favorably favorably with our fourth quarter 2019 performance.
The most recent comparable period of normalized operations.
Average guest spend and revenues to stocks a day were up double digits compared to Q4 2019.
In addition, pre booking as a percentage of service revenue service frequency per guest and guest penetration also compared favorably to the fourth quarter of 2019. These.
These improved operating metrics were driven by the continued innovation in our offering and focus on staff training.
In Q4, 'twenty two verses Q4, 'twenty one metrics also compared favorably for example average weekly revenue per ship Rose nine point.
6% from Q4, 2021 and revenue per ship cause staff per day increased 13, 5% from Q4 2021.
In addition average weekly revenue per resort rose, 16% from Q4 of 2020 one.
It's incredible to consider that just one year ago. We're in the midst of Emricasan shifts to a still returning to service by cruise line services and load factors were below 60%.
We are we are eager for load factors to return to a more normalized level, which our cruise line partners expect by the end of scraped.
This will allow us to increasingly showcase are even more attractive business model to passengers.
As such we continue to prepare for this by leveraging our unique capabilities, including a core competency of recruiting and training.
In the fourth quarter, we on boarded.
1068 staff members and by the end of the quarter. We had 3566 cruise ship personnel on vessels for actual and expected voyages and this figure is expected to grow to 3663 employees by the end of Q1 2023.
Yeah.
Our priorities in 'twenty to 'twenty three are focused on capturing highly visible new ship growth with current cruise line partners, which most recently was demonstrated by a new agreement with Norwegian cruise line holdings through 'twenty 'twenty nine covering 29 ships current currently sailing in eight new ships anticipated to come into <unk>.
This during the term of the agreement.
Additionally, we expanded our contract with mirella, adding two new ships in Q4, and now operate health and wellness centers on their entire fleet.
Second increasing guest spend spa capacity utilization and retail revenues.
To accomplish this as we continue to launch higher value services, including pain management and recovery technology expand the adoption of dynamic pricing by cruise line partners and.
And grocery booking in prepayment appointments, which yield a 30% lift in revenue versus services booked onboard.
Notwithstanding certain economic headwinds our positive performance has continued in the first quarter of fiscal 2023, reflecting our outstanding guest service and product offerings buoyed by the heightened consumer demand for hospitality travel experiences.
With a full fleet of cruise ships finally, sailing and 10, new builds commencing voyages. This year, we expect fiscal 2023 to be another year of accomplishment and increasing value for one spa wheelchair holders.
With that I'll turn the call over to Stephen who will comment on our fourth quarter and fiscal year 2022 a result Steven.
Thank you Linda good morning, everyone.
We showed significant progress across all of our key performance metrics through fiscal 2022.
In addition to substantially strengthening our balance sheet position.
I will now share more details on our fourth quarter and fiscal year results that we reported this morning.
Total revenues were $168.9 billion as compared to $85 7 million in the fourth quarter of 2021.
The revenues generated in the three months ended December 31, 2022 were derived primarily from our 177 health and wellness centers onboard ships have been resumed wages.
And our wholesale wellness centers at 48 open and operating destination resorts.
The three months ended December 31, 2021 revenues were primarily related to our health and wellness centers on 118 cruise ships and in 48 destination resorts that were opened during the quarter and e-commerce product sales to the company's time too small dot com websites.
Cost of services were $114 $9 million compared to $58 $7 million in the fourth quarter of 2021.
The increase was primarily attributable to costs associated with increased service revenues of $139 million in the quarter from our operating health enrollment changes at sea and on land.
Paid with service revenue of $68 $8 million in the fourth quarter of 2021.
Cost of products were $24 $3 million compared to $15 5 million in the fourth quarter of 2021.
The increase was primarily attributable to costs associated with increased product revenues of $30 million, you look water flow matter upgrading health enrollment status at sea and on land compared to product revenues of $16 $8 million in the fourth quarter of 2021.
Net loss was $2 $3 million compared to a net loss of pinpoint on billions of dollars in the fourth quarter of 2021.
The improvement in the fourth quarter was 2022 was primarily a result of the positive 14 7 billion dollar change in income from operations. The rock from our operating 177 health and wellness centers onboard ships have you lose your wages offsetting higher other expense attributable to increases.
And interest expense and the change in the fair value of that warrant liabilities.
Adjusted net income was 12 $8 million or adjusted net income per diluted share of 14 pennies as compared to adjusted net loss of $800000 or adjusted net loss per diluted share of one penny in the fourth quarter of 2021.
Adjusted EBITDA was $27 million compared to adjusted EBITDA of $4.8 million in the fourth quarter of the prior year.
For the fiscal year.
Revenues were $546 3 million compared to 144 billion in the year ended December 31, 2021.
The revenues generated a gain in the year.
Dara, it's primarily for about 177 health and wellness centers onboard ships heavy with wages.
And our health and wellness centers at 48 open and operating destination resort spas.
Revenues for the year ended December 31, 2021 will negatively impact impacted by the COVID-19, pandemic and the resulting March 14th Twenty-twenty No same order.
With revenues derived primarily from health and wellness centers onboard 118 ships and in 48 destination resorts that are open and operating for partial periods. During the 12 months period and e-commerce product sales to the company's time to Spa Dot Com website.
Cost of services were $375 $1 million compared to $108 9 million in the year ended December 31st where do you want.
The increase was primarily attributable to costs associated with increased service revenues of $446 $5 million in the year.
From an operating health and wellness centers at sea and on land compared to service revenue of $115 million in the 12 months ended December 31st 2021 and increased costs related to the resumption of operations at our health and wellness centers at sea and on land.
Cost of products were $87 6 million compared to $26 6 million in the year ended December 31, 2021.
Increase primarily attributable to costs associated with increased product revenue of $99 $7 million in the year ended December 31, 2022.
Product revenue of $28 1 million in the year ended December 31, 2021.
The amount of operating health and wellness centers at sea and on land knitting.
Net income was $53.2 million compared to a net loss of $68 $5 million in the prior year.
The improvement in the year ended December 31, 2022 was primarily a result of the $67 2 million positive change in income from operations derived from 179 health and wellness centers heavy with wages and the change in the fair value of warrant liabilities.
As you know the change in fair value of the outstanding warrants during the year ended December 31, 2022.
What was the gain of $54 $4 million compared to a loss of $2 $6 million. During the year ended December 31 2021.
Change in the fair value of the warrant liabilities.
As the result of changes in the market places deriving the value of these financial instruments.
Adjusted net income.
$26 $7 million or adjusted net income per diluted share of 28 pennies compared to adjusted net loss of $42 million or adjusted net loss per diluted share of 45 pennies in the prior year.
Adjusted EBITDA was $54 million compared to negative $18 $9 million in the prior year.
Turning to our balance sheet.
Cash and borrowing capacity under the company's line of credit, which is fully available at December 31, 2022 totaled $53.3 million.
In the fourth quarter, the company repaid $10 million on its second lien term loan and in February paid another 5 million, leaving $10 million remaining under this loan.
They can be in carried interest at a rate of LIBOR, plus seven and a half since.
We expect to continue utilizing cash generated from operations to extinguish this facility and have no material debt maturities until March of 'twenty 'twenty six.
We ended the year with total cash of.
It is $3.3 million and total debt net of deferred financing costs was 212 $28 million.
In the fourth quarter Unlevered after tax free cash flow was $19 million compared to a $3 million in the fourth quarter of 2021.
For the fiscal year Unlevered after tax peak cash flow was $45 $1 million compared to a negative $22 million in the year ended December 31, 2021.
The company expects to continue to generate positive cash flow from operations in the first quarter of 2023 and throughout fiscal year 'twenty to 'twenty three.
Moving then on to guidance with our full return to service normalizing operations and operational visibility well pleased to reintroduce a quarterly outlook and have reiterated our annual outlook.
For the first quarter, we expect total revenues in the range of $170 million to $175 million and adjusted EBIT in the range of $16 million to $18 million.
Our first quarter guidance assumes an ending ship count of 179, and we expect to have 3663 employees on cruise ships by quarter end and to operate at 52 destination resorts.
For fiscal 2023 we expect total revenues in the range of 662 $680 million and adjusted EBITDA in the range of $64 million to $70 million.
We expect to end fiscal 2023 operating on 187 cruise ships and at 52 destination resorts.
Overall, I feel very confident about our growth initiatives, we begin fiscal 2023 operating from a position of strength.
Health and wellness centers onboard cruise ships and destination resorts on land are open our starfish, providing exceptional experiences for guests and we are continuing to innovate our product and service offering.
This in addition to our strengthened balance sheet has us well positioned to continue innovating a highly complex business model to deliver annual year over year growth in revenue earnings and cash flow.
And with that stage, we will open the call for questions. Thank you.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two at.
This time, we will pause momentarily to assemble our roster.
Also please limit yourself to one question and one follow up re queue to ask additional questions.
Yeah.
Our first question comes from Steve Who's in ski with Stifel. Please go ahead.
Hey, guys good morning.
So so can you help us think about it.
How we should be thinking about any material seasonality this year and I guess, what I'm getting at is we go back and look at.
2018, 2019, even when you guys were Steiner leisure again, there was a little bit of a different business. It seemed like there really wasn't much seasonality you know here, except for really around the fourth quarter and I guess, what I'm trying to understand is if you know based on what you just put up in the fourth quarter and based on what's your first quarter guidance is you know it seems.
If the consumer stays pretty much status quo through the year shouldn't there be some some upside to your current guidance range.
Am I not thinking about that the right way.
Yeah, Steve you're absolutely right I mean, we have very moderate seasonality in that business. I mean, you know the second and third quarters are always being the strongest I mean, clearly 2022 fourth quarter surpassed our expectations. We had a very healthy fourth quarter, even though you have a lot of <unk>.
That are repositioning back from Alaska and the med.
We just we just knocked it out the park completely at the first quarter is you know came out of the gates and it typically does I mean, neither fell at the right time. This year. So we've got a strong push off into the first quarter.
But first quarter typically is not as strong as second and third.
But is decent so to your point.
You know we rarely in the early innings of the year.
I mean, the strength that we've seen thus far through a month and a half is.
He is definitely you know it gives us a lot of confidence, but I think it's premature for us to start guiding upwards.
But we're very comfortable with the guidance that Steven read out to you on the call.
Okay. That's perfect I didn't think you were really going to answer that too much but I took it but my best shot at it.
Second question, you know uses of your free cash.
You know look again, if we go back to your guidance you know it seems to us you'll be generating what's you know, let's call. It 60 to 65 million of free cash flow this year.
You only got 10 million left to go on your second lien. So that's gonna leave a sizable amount of cash to be put to use. So just want to understand maybe how you guys are kind of thinking about that once you do pay down that that that second lien.
Steve I think I would answer that.
Simply yes, it depends some of it will depend on what happens with interest rates and how they play out through the remainder of the year, but I will tell you that as always we evaluate uses for cash given current interest rates, it's likely that we continue to pay down debt, but our overarching theme would be.
With that we will continue to evaluate best uses of cash, including a dividend payment.
Okay understood. Thanks, guys really good quarter appreciate it.
Thank you.
Our next question comes from Max Rack, Glencoe with Cowen and company. Please go ahead.
Great Good morning, and nice job guys.
So first can you discuss some of the ways that you are looking to increase guest spend.
What's your initiatives do you think will be the top needle mover versus this year and how should we think about the cadence of the rollout.
Okay.
So look backs. We you know we introduced a hallmark pricing at the end of the fourth quarter because of the Christmas New year, we continue to see.
Strong demand decent spans strong spend actually during January so far nothing too you know nothing to two to alarm that spend is falling off and you know we introduced a bunch of new services in in the the Metis bar Arena last year sort of in it.
The IV the immunity shot.
Acupuncture is continuing to elevate itself like I have a lot of compelling new programs and acupuncture and with attached retail spend so we continue to focus on that.
You know a bundling services together getting more into a pre booking engine is certainly helping and that that window has expanded our from what we saw back in 2020. One so that continues to give me confidence that demand and spend will continue to move in the right direction for us.
Got it that's helpful and then what about the product revenue line.
What are the top opportunities there to accelerate drilling and then just your outlook for the segment for.
For the year and then just any margin implications.
Yeah, So our number one.
They sell the most retail.
And I think we mentioned this before is our fitness stuff. They tend to do a lot of you know consultative work nutrition counseling. So a lot of supplements pick them packages that has continued to elevate as we've continued to staff better in our fitness complement in the beginning of 'twenty.
22, stopping in fitness was probably the lowest we had seen and we continue to strengthen in that arena right through the year and peaked in 2022 in the fourth quarter and that's certainly a focus we got to continue to to watch.
But theres also a biotech facials new elements facial continues to get a nice retail attachment and that continues to perform well and I think when you see those kind of services continuing with the strength that we've seen even in the first months of 2023. It gives me real.
Confidence that the attachment rates will continue to grow we're going to continue to you know.
Move a lot of our sales and revenue people around the different geographies. So we can do intensification to continue to strengthen and motivate I stopped to continue to grow retail attachment through 'twenty two 'twenty three.
Got it and just very quick follow up to that your staff levels on board.
Happy are you with those levels are you, where you want to be or is there still more room to go just to get more especially of your best people on board.
A lot and best of luck.
Yeah, I'm very happy with stopping I mean, I think our London Wellness Academy, the recruiting and training teams have done a phenomenal job of getting our staffing levels above 90% and we continue to look at the opportunity, where we can get closer to a 100%, which historically, we never actually been at 100% on all ships, but now we're looking at the Apis.
<unk> T is across different modalities, where we can load up more stuff and we will continue to do that through the first and second quarters as load factors continue to climb.
Okay.
Awesome. Thanks, so much.
Yeah, you're welcome.
The next question comes from Gregory Miller with Truest Securities. Please go ahead.
Thank you good morning, gentlemen, I want to start off asking you about younger passengers the generation Z customer debt for minor thing is more focused on mental health and the read through to how they spend.
Their discretionary wallet on wellness and I'm curious, what you're seeing today in terms of the generation Z customer to your facilities and what opportunities are that you might see to target the mental health interests of this customer base.
Yeah, so certain banners cater more to that.
Demographic and we continue to see very strong demand when ships such as Virgin.
Where we see a younger demographic on board.
A couple of the other banners as well tend to.
You know I have quite a decent content, let's see more of those people cruising in the summer again.
And we expand I mean, we cover a lot of areas and wellness, whether it be a meditation.
Wellness programs on some of the more luxury ships, but those are definitely not your gen Z people.
But yeah wellness continues to be a category category that we feel there is ample opportunity for us to load up on more types of services. So that's an area that we focus on acupuncture has been something that has grown the most in 'twenty two.
Two than we've seen historically so there clearly is a demand for wellness I think coming out of the pandemic. The immunity concerns supplementation around immunity immunity shots definitely is in high demand.
Excellent I appreciate that and then my follow up I was curious to get your thoughts about some of your ships that still don't have a significant medi spa offering perhaps some bigger luxury ships are inclusive of that.
Do you think that the meta spa is better suited.
For say a contemporary ship for.
Some of your smaller luxury ships or do you continue to anticipate expansion of Medi spa offerings to some of the smaller luxury ships that you service.
Yeah, that's a good call out I mean, you know as you move up the chain in age our medi spa or is something that becomes much more selective than opportunistic experience.
We certainly feel that the breadth of demand is more in the contemporary mass market and that's where we excel.
Certainly as you move up the age chain people are set as to who the provider is in a very selective about it but we're still doing nicely.
The obvious problem and the constraint around.
You know real estate is what limits us on both some of the luxury ships, whereas we will continue to get new ships. This year that are going to have a much better.
Facilities than you'll find on the smaller ships. So we will see you know the mix of Medi Spa move upwards and we're excited about that as we continue to look at more opportunity to load and more stops, particularly nurses that can complement some of the services that we provide on board. So I think this year we got.
Actually see a very nice move up in Medi Spa.
Facilities on board ships.
Great. Thank you very much.
Yeah, you're welcome.
Our next question comes from Laura Champine with loop capital. Please go ahead.
Thanks for taking my question I wanted to get a sense of what the trend is in ship size and also the trend in average age of your customers.
So I think if you take a look out at the order book, you'll see that I, you know pretty much the biggest ship coming on board that is being built right now is royal Caribbean icon, that's the largest ship that's ever going to be out there I think for the most part.
Cruise ships have settled into a size where passenger on a lower book basis is measured anywhere between I would say 40 550 500. Those are the largest ships out there I think if you looked at the average it's probably closer to the 4500.
And I don't see ships getting much bigger than that suddenly the icon is the newest one that would be of enormous scale I mean, it's like it's bigger than a larger village.
It's an incredible strip, that's coming out but that that's that's something that's an outlier and its unique and just as Royal Caribbean launched the largest Sydney as they the wonder of the seas and similar classes of ships. This one is suddenly got upset.
Our new size so to speak in terms of shipbuilder, but for the most part if you look at the order book I think it's pretty steady Eddie now.
Got it and then the second question was on your.
Average customer age and how that may be trending.
Yeah, you know that varies across the different banners.
I'd say, the sweet spot somewhere between 45 and 55, obviously that changes during the summer where you have a lot of kids go on board. So that could go lower but generally speaking, it's it's it's anywhere between sort of <unk>.
Early forties and an early fifties tends to be a general population and then as you move to some of the the luxury brands and some of the other brands than the age group does move you know well above 65.
Got it thank you.
Of course.
Our next question comes from Sharon Zackfia with William Blair. Please go ahead.
Hi, good morning.
I Wonder John if you could give us an update on kind of where that is as a percent.
Maybe it services transactions or revenues.
Any insight into how a lot of them.
And our weekend lunch is gone on pre booking.
Hey, Sharon to Norwegian we just commenced the pre booking in Q1.
And we will rollout the entire fleet. This quarter, we had taken bookings in Q4 for services in Q1. So we had started on one of the ships the encore and we will continue to roll vigorously now through the first quarter. So you know we're in pre booking at about 80%.
Once we have Norwegian fully loaded will get closer to 90, which is incredible.
Thank you for that and then just a quick question on panel and looks like the salary and payroll kind of jumped up about 35% sequentially in the fourth quarter was there something that was bonus accruals or anything that we should think about in that number in the fourth quarter.
Yes that is exactly what you should think about so as we headed into the fourth quarter.
With the incremental performance that was achieved with performance bonuses that were accrued for in the quarter. So you'll you'll.
Thinking of the reason there is spot on.
Great well, congratulations on getting the bonuses and well chat later.
Thank you.
Our next question comes from.
I Asa towards Eva with Infinite Infiniti Research. Please go ahead.
I know this is my 10th.
Gratulation somehow very nicely done the job in Q4 keep it up and again I'm looking forward to a great fiscal 'twenty three.
I had a couple of questions first of all it seems that you'll be adding about 500 more staff by the end of this quarter. So I would expect that there will be incremental expenses that we will see in this quarter only and that may not be repeated for the balance of the year is that is that fair.
Yeah.
Okay.
Yeah. So look I mean as you know is our onboard model is primarily variable so adding staff in of itself.
He has a very very small fixed cost component.
Particularly on the much bigger ships, where you know they you know it's all commission based.
Primarily obviously, you've got you know.
The lodging in the end and food costs that you have but it's more than offset by the revenue that they will generate then yes. It is a big number that we're going to load up for but quite frankly, all of that's going to complement and add to the revenue generating capabilities of load factors continue to increase.
Through spring.
But it will obviously taper off as we get into the back quarters correct.
I was thinking more about the logistics of getting.
Just after the ships and all that but that's probably a small piece relative to the revenue generation.
Yeah.
Yeah actually you know I'm looking at the number we were just.
Trying to see where you got the 500 start from I think it's more like 150 stuff but.
Look all of that in the guide I may have missed card, maybe yeah, because I didn't think we'd see something by 500 in a quarter.
I think if you take a look at the numbers, we gave out its closer to say about 150 stuff.
I'm sorry, Mike.
My Bad and the second question were still quite a ways away from a deal.
The European summer season, but in terms of the numbers that I'm seeing for my pricing surveys, which cover about 30000 villages.
It seems the Caribbean is doing extremely well a lot more north American passenger demand than European and given that you work with so many.
Brands that are focused even during the winter months, some European sourcing whether its a to the middle east or in the med.
Are you seeing this dichotomy or is it something that's not.
I'm the only one thing.
About.
Look Sidney the Caribbean is performing fantastically and we've we've had a lot of ships here in the fourth quarter as you well know they'll start to reposition you know late sort of middle of April beginning of May.
To the various destinations such as Alaska and the med, primarily the med was a little soft last year I'm expecting the met to be better this year.
You know I think you're going to see you know given exchange rates et cetera. The strong dollar I think Americans are going to continue to travel and experience.
Perhaps things that they weren't able to do last year and take advantage of that so yeah look I'm hitting the Americans by far North Americans, particularly spend the best.
But we do see the Europeans now coming.
As as they blow at the Covid restrictions they've seen a lot more Europeans come into the Caribbean geographies as well this year.
Oh, there it does seem to be demand.
And I'll tell you from Atlantic in terms of travel and I think last year.
Especially with the airlines, we saw how busy they were so hopefully we'll have a more streamlined but just as he sees them.
And the last question.
In terms of M. A C is there an opportunity they are isn't something that we can consider.
There's a potential customer.
Yeah.
You know, there's some things you wake up in the morning, and you just hope it happens and MLC would be lovely to have its definitely on my bucket list.
And ultimately hopefully one day I mean, maybe we can convince them to let us help them out but at this point in time, there's nothing to report.
Okay, I appreciate that and I'm, sorry for the very direct question.
That's all right I'm used to.
Again, thank you so much.
Okay, you're welcome.
Again, if you have a question. Please press Star then one.
Yeah.
At this time, we have no more questions. This concludes our question and answer session I would like to turn the conference back over to Leonard Flaxman for any closing remarks.
Alright, Thanks, David.
Thanks again, everybody for joining us today it was definitely a great here good returned to service.
Continue to look forward to 'twenty to 'twenty, three with with a positive outlook and we look forward to speaking with you. When we report first quarter results in May thanks, everyone Bye bye.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Yeah.