Viad Corp Q1 2023 Earnings Call
We had a strong momentum in each business heading into the rest of the year and we are raising our full year guidance.
After nearly three years of travel restrictions, we're seeing pent up demand for face to face corporate meetings and a trend where consumers are prioritizing leisure travel every indicator IC at Ges and pursuit points to continued strength.
Suits lodging booking pace for the balance of 2023 is stronger than the pace in 2022 and 2019 at the same time in the year and particularly strong in the Banff Jasper collection.
As we expected the elimination of travel restrictions and the accelerating international leisure travel are driving demand for experiences across our portfolio.
Additionally, Ges continues to see same show revenue above 90% of 2019 levels and strong corporate spending per experiential marketing.
Those continue to grow Ges is in a great position to leverage its lower cost structure and drive higher profitability.
Based on our first quarter performance and the momentum we're carrying into the rest of the year I feel confident in raising ges's full year guidance.
We're experiencing some tailwind and the team is excited about delivering a strong year Ellen will give more details on guidance later in the call and now I'd like to turn the call over to Ellen to discuss our first quarter financial performance in more detail Ellen.
Thanks, Steve as shown on page six we delivered consolidated revenue of $216 8 million. During the first quarter. This is up 47% or $83 4 million year over year, driven primarily by strengthening demand for expedition been events and higher international tourism into Western Canada.
In Iceland.
Net loss attributable to the improved by $8 $1 million to a loss of $20 9 million.
That's before other items was $22 million as compared to a loss of $27 3 million in the 2010 first quarter, primarily reflecting higher adjusted EBITDA, partially offset by higher interest expense and a lower tax benefit.
Our consolidated adjusted EBITDA was $3 4 million, which is $14 7 million better than the 2018 first quarter and also meaningfully better than our prior guidance.
Adjusted EBITDA exceeded the high end of our prior guidance range by about $5 7 million driven by stronger than expected revenue.
Christie also slightly exceeded the high end of guidance during the seasonally slow quarter.
As shown on page seven we saw significant growth in revenue and improved adjusted EBITDA, both pursuit and Ges versus 2022, as we continue to see strengthening demand within our markets.
Proceeds first quarter revenue grew 37, 3% and $32 7 million.
<unk> adjusted EBITDA was negative $10 3 million during the seasonally slow quarter, which is an improvement of $1 2 million year over year on the higher revenue.
This stronger year over year performance reflects improved international visitation that skyler are year round Canadian experiences and our flyover locations at Ges overall revenue grew 48, 5% to $228 1 million as demand for exhibitions and experiential marketing continued to strengthen.
Adjusted EBITDA improved to $16 7 million, which is up $14 million from the 2022 first quarter.
AMG has delivered an overall adjusted EBITDA margin of seven 3% on its lower cost structure next.
Next I'll quickly cover some balance sheet and cash flow items before David and Steve.
More deeply into business highlights our cash flow from operations. During the quarter was an inflow of approximately $10 million our capital expenditures totaled about $11 million and included growth Capex for the flyover Chicago build project and some refresh projects at Pyramid Lake resort.
We ended the first quarter with total liquidity of $139 9 million, comprising $50 8 million in cash and approximately $89 million capacity available on our revolving credit facility.
Our debt totaled approximately $478 million, including $394 million on our term loan b.
<unk> lease obligations of approximately 65 million a $12 $4 million construction loan to help fund the development of the Forest Park Hotel and other debt of approximately $7 million.
During the quarter, we took some actions to protect our balance sheet in light at the higher interest rate environment, we entered into an interest rate cap agreement to hedge our exposure on $300 million of our floating rate term loan b and.
And we amended the interest coverage ratio applicable to our revolving credit facility to provide additional cushion for compliance through the duration of the facility.
Additional balance sheet and cash flow details can be found in the appendix of our earnings presentation.
And now I'll turn the call over to David to discuss pursuit.
Thanks, Alan during the last earnings call I shared three areas of focus for pursuit during 2023 revenue growth margin expansion and winning the war for talent.
Today I'm happy to report that we are performing very well against all three.
<unk> delivered a very strong start to the 2023 year with record first quarter revenue and improved year over year margins and we're super pleased with the performance of our year round experiences during the quarter and the improved demand from international visitors, which we believe affirms our outlook for very strong year over year revenue and margin growth over the balance of 'twenty three.
I'm also pleased to report that we continue to succeed in the war for talent staffing levels for 2023 are light years ahead of where we've been with each of our major geographies now very close to fully staffed and ready to serve guests in the peak summer season.
So let's dive into our first quarter financial performance page nine the accompanying deck illustrates our first quarter results and the benefits of pursuits refresh build buy growth strategy.
<unk> Q1 revenue increased 37% from 2022 is international leisure travel to our markets continues to accelerate and our new experiences continue to gain momentum.
The lifting of Covid restrictions and strong consumer demand for high quality hospitality experiences.
Fueling a significant increase in visitation all across pursuit.
Visitation volume is directly correlated to EBITDA margin and with guest volume increasing materially pursuits Q1, adjusted EBITDA margin also improved year over year.
The new year round experiences that we've opened or acquired from 2019 through 2022 collectively delivered more than half of pursuits, 2023 first quarter revenue with a very strong year over year growth rate of 47% driven primarily by an acceleration of attraction visitation.
Same store revenue from experiences that were operating within pursuit. Prior to 2019 also experienced significant year over year growth of about 28% and on a same store basis versus 2019 pursuits first quarter revenue grew 48% as the refresh investments we've made drove gains in guest satisfaction.
Greece visitation pricing power and ancillary revenue growth.
Page 10 in the slides covers our Q1 attractions performance, there's a lot of great information on this page, but I'd like to call out a few important highlights.
First is the 56% year over year growth, we realized in visitors to the new year round experiences we've opened from 2019 forward.
Our strongest growth came from Sky lagoon in Iceland, which posted a 74% increase in visitors versus the 22 quarter.
We're extremely pleased with how this attraction is performing and growing.
Visitation growth at our new fiber locations is also very strong flyover, Iceland visitors grew 47% and flyover Las Vegas visitors grew 42% from the 2020 to first quarter.
International travel to Iceland is improving and our world class attractions, there are capitalizing on that trend.
We anticipate that inbound airline routes in Iceland serviced by Iceland Air play Airlines in the major international carriers will meet or exceed 2019 levels. This year and that should help drive continued growth in both fiber, Iceland and Sky lagoon.
The fiber Las Vegas, our work to secure partnerships with the major Las Vegas ticket distribution platforms is paying dividends.
Additionally, we are driving increased guest awareness through partnerships with the Las Vegas, Golden Knights and others, including an exciting album release, we recently did for the Jonas brothers.
I also want to highlight our strong same store attraction visitor growth of 26% year over year and 25% from 2019, driven by our year round attractions in Western Canada, flyover, Canada, and the Banff gondola.
And flyover, Canada in Vancouver, I am happy to report that first quarter visitation, but nearly recovered to the pre pandemic levels experienced in the 2019 first quarter.
The port of Vancouver, anticipates, a record number of crews arrivals and passengers to travel through the Canada place terminal in 2023, and our flyover, Canada attraction is uniquely positioned to capitalize on that increase visitation.
The Banff gondola visitors were also up significantly year over year and as compared to 2019. This growth reflects strengthening international tourism and our launch of the <unk> winter experienced at the top of the gondola that is drawing increased visitors during this otherwise slower period.
And finally is it relating to attractions performance, we've been successful driving higher effective ticket prices, both year over year and versus 2019 on the quality of our experiences.
So now I'll turn my attention to our lodging properties, which are referenced on page 11 of our earnings presentation Q1 rooms revenue of $7 6 million grew 10% from 2022, driven by a 6% increase in occupancy and by an increase in available rooms with the new Alpine wing of the Forest Park Hotel that opened in Jasper and mid 'twenty two.
Same store Revpar grew 26% year over year, driven primarily by stronger occupancy at our Banff hotels as international visitation to Western Canada improved.
As compared to 2019 first quarter rooms revenue more than tripled driven by our investments to expand and improve our hotel portfolio.
And moving on to our ancillary revenue streams, we saw solid revenue growth as we capitalize on the integration of packaging food and beverage retail and transportation experiences with our attractions and lodging lines of business.
Relative to the same period in 2022 retail revenue increased 57% transportation revenue increased 65% and food and beverage revenue grew by 44%.
So now I'll provide you a brief update on our outlook for the year ahead, we're very encouraged by our own booking pace and by the strong trends in consumer demand for high quality leisure travel experiences that we're seeing broadly around the world.
Attractions ticketing revenue in Banff and Jasper is pacing, 25% ahead of 2022 and with renewed ease of border crossings into Canada. We remain confident that we'll reach our target of achieving same store attraction visits of at least 95% of 2019 levels.
Our revenue management and operating teams are hard at work executing on strategies for regaining pre pandemic visitation volumes at those locations that were more dependent on long haul international visitors and I'm pleased with the progress we're making against those initiatives.
As shown on page 12, our lodging bookings for 2023 are pacing very well and support our outlook for a much stronger year.
Hotel booking pace is particularly strong in Banff, and Jasper, which are accelerating with the removal of COVID-19 restrictions casting and quarantine risk.
2022 was a record season for lodging in Alaska in Montana, and we're pleased to report these markets. Both continue to pay strongly into 'twenty three as we maintained very high levels of sales and occupancy across both geographies.
<unk> business is built such that profitability grows materially with incremental increases in attractions visitation.
With guests now able to enter western Canada in Iceland seamlessly and without restrictions, we're confident that increased visitation will drive a material year over year increase in EBITA margin and keep us on track to achieve 30% plus levels by 2024 and in the years ahead.
So in closing we're pleased with our first quarter results and we're confident in the momentum we have heading into summer, we see don't cracks in the armor and are confident that our targets for 2023 are well within reach.
Just wanted to thank our operating and support teams around the world for helping deliver such a great quarter and to everyone for all the energy and effort in preparing for the busy times ahead.
Steve back to you.
Thanks, David now, let me switch gears and provide some insight into the Ges business, which includes both ges exhibitions and our experiential marketing agency Spyros.
Overall, I'm pleased with <unk> performance in the first quarter and a strong start to 2023 during the first quarter Ges performed better than expected on stronger than anticipated revenue growth and I am pleased to say that based on our first quarter performance and our outlook, we're raising our full year guidance for Ges with.
I expect 2023, adjusted EBITDA to be in the range of <unk> $52 million to $60 million versus our prior guidance of $48 million to $58 million. The raise reflects our over performance in the quarter, partially offset by the cancellation of three a major gaming event in the second quarter.
Page 14 of our earnings presentation highlights the strong year over year growth in consolidated revenue and a significant improvement in EBITDA and margin.
During the first quarter Ges delivered $228 $1 million in revenue up $74 6 million over Q1 of 2022, and $16 7 million and EBITDA of $14 million over the first quarter of 2022.
The topline growth in the first quarter was driven by Spyros growth of 41% and Ges exhibition growth of 52%.
As a reminder, the first quarter of 2022 was negatively impacted by event postponement due to the resurgence of the omicron variant of COVID-19.
Our overall profitability was strong at greater than 7% margin and the flow through to EBITDA on the year over year incremental revenue was nearly 20% our efforts to improve the cost structure within exhibitions and to drive profitable growth at spire ROE from new client wins and increased spending from existing clients or <unk>.
<unk> great results. This is clear when you look at the first quarter compared to 2019, adjusted EBITDA improved $5 $8 million on lower revenue, indicating that our lower and more variable cost structure.
And the pruning of less profitable business are paying off.
Now I'd like to discuss the first quarter at Spiro, our experiential marketing agency, which serves as the agency of record for a great roster of Fortune 1000 corporate clients.
During the first quarter expired delivered $64 million in revenue and $3 $7 million in EBITDA for an EBITDA margin of six 2% as seen on page 15.
<unk> continues to see strong spending from its corporate clients with marketing budgets approaching 2019 levels as well as new client wins.
Over the past year, I've talked about Ges's investment inspired to build out new capabilities, which would enable spiroid to become a leading global experiential marketing agency.
<unk> has an opportunity to generate growth by expanding the range of marketing services that we sell to our existing clients and by winning new clients to drive greater market share within this large and fragmented industry.
On past calls I've highlighted a few of those client wins like J P. Morgan <unk>, Sirona and John Deere and I'm happy to report that Spyros continued its winning trend in 2023 with seven new client wins year to date, including Mcdonald's 2024 worldwide Convention.
This premier event will be held in Barcelona, Spain, It's one of the Mcdonalds largest events and is expected to attract over 10000, Mcdonald's owners and operators from around the world I'm very proud of our team and happy to see the benefits of our investment strategy.
Next I'd like to talk a little bit about the performance at Ges exhibitions, which provides tradeshow services to leading event organizers in North America, Europe , and the United Arab Emirates.
During the first quarter Ges exhibition delivered $169 $5 million in revenue and $13 million in EBITDA for an EBITDA margin of seven 7% as seen on page 16.
As compared to the first quarter of 2022 revenue grew nearly $58 million as we continue to see larger show sizes and a return to a more normal show schedule and the absence of Covid disruptions.
Roughly $15 million of the year over year revenue growth was attributable to events that were postponed in the first quarter of 2022. Additionally, Ges's same show revenue from U S exhibitions produced during the quarter grew 26, 4% year over year and reached 91% of 2019 levels.
<unk>.
<unk> first quarter, adjusted EBITDA improved by $11 million, a year over year and by $4 million as compared to 2019 the.
Our strong profitability is attributed to the significant cost structure changes made over the past three years.
Prior to the pandemic GFS exhibitions outlined a multiyear lean operation strategy to drive significant cost out of the business and to provide the business more flexibility and improved cash flow.
The team took advantage of the pandemic to accelerate the strategy and reduced our SG&A costs by more than $50 million through the reduction of our head count and our facility footprint. However.
However, our lean operations journey did not end as revenue returned the lean projects that the Ges team worked on in 2022 are starting to pay dividends in 2023, and I am very encouraged that the team consistently find new opportunities to help offset higher wages and supply chain challenges we see.
I'll have more to come in our transformational efforts and I look forward to sharing more progress through the year.
Before I hand, the call over to Alan I want to reiterate the momentum we're seeing in the Ges business. Our first quarter performance reflects the pent up demand for meeting clients face to face and the value proposition that trade shows and other similar events provide.
The level of same show revenue growth and continued recovery that we've seen is very encouraging but the upside from full recovery is even greater than that remaining 9% to hit 2019 levels.
As shown on page 17 shows sizes are still about 20% below pre pandemic levels as smaller exhibitors and international exhibitors have yet to return in full.
We believe this recovery will come within the next couple of years and when it does we should see strong flow through from those incremental revenue dollars.
Our teams are focused on improving financial performance strong execution, and lean cost savings and exhibitions, while driving new corporate marketing wins at Spiro.
And now I'll turn the call over to Ellen to review of our financial outlook.
Thanks, Steve before covering our second quarter guidance I want to provide some updates on our full year outlook, which is shown on page 19.
We now expect consolidated adjusted EBITDA to be in the range of $124 million to $141 million versus our prior guidance of 120 to 139 million.
And $116 $1 million in 2022.
As Steve mentioned earlier the increase in your guidance range is based on a significantly stronger than expected growth at Ges that we experienced during the first quarter.
We are not adjusting full year guidance for proceed at this time given the most critical months of the year are still ahead of US. However, the strong Q1 performance pacing and pacing that we're seeing it's more room for upside performance than downside risk relative to our full year guidance for pursuit.
Along with the improvement to our adjusted EPS guidance, we're also raising our expectations for full year cash flow from operations.
Now expect an inflow of $70 million to $80 million as compared to prior guidance of $65 million to $75 million.
Additionally, we have reduced our full year capital expenditure outlook to reflect the revised timing of select refresh build buy growth investments at pursuit.
We now expect full year capital expenditures to be in the range of $70 million to $75 million.
Including approximately $35 million of growth Capex.
Growth Capex was primarily related to the fire of Chicago build and refresh investments at Pyramid Lake resort and Jasper.
Now turning to the second quarter guidance, which is outlined on page 12, we expect consolidated results to be below the second quarter of 2022, driven largely by changes in the Ges business, including the sale of on services the impact of shares shifting back to their normal Q1 timing after being postponed into Q2.
Last year.
And some other nonrecurring business, partially offset by positive share rotation.
So ges, we expect second quarter revenue to be in the range of $200 million to $220 million as compared to $241 6 million in 2022.
Ges's second quarter adjusted EBITDA is expected to be in the range of $20 million to $24 million.
Which reflects a healthy margin of about 10%.
We expect continued growth at pursuit to partially offset the lower year over year results at Ges.
We anticipate second quarter revenue to be in the range of $89 million to $93 million as compared to $77 6 million in 2022.
Pursuit second quarter adjusted EBITDA is expected to be in the range of 19% to $22 million with healthy margin flow through on that revenue growth.
Regarding cash flows we expect an operating cash inflow of $15 million to $20 million during the quarter and capital expenditures of $25 million to $30 million, including growth capex of about $13 million.
Before turning the call back to Steve for some concluding remarks, I want to reiterate our favorable outlook for 2023 with no signs of slowing consumer demand in either of our businesses, we have meaningful tailwind that pursue and a leaner cost structure at ges.
With that backdrop, we are comfortable with our planned level of capital spending.
However, we stand ready to make adjustments to both capital and operating expenses should the need arise.
With that back to you Steve.
Thanks, Alan we're off to a great start in 2023 and are very optimistic about what lies ahead ges.
<unk> continues to see positive momentum in the live event sector and pursuit of seeing ongoing acceleration of international visitation and growth across its experiences.
We expect this positive momentum to continue throughout 2023.
And as we look further ahead to 2024, we expect strong tailwind for both pursuit and Ges.
Pursuits should see a more fulsome recovery of long haul international travel trade visitation. The continued ramping of our new experiences and the opening of flyover Chicago. This increased visitation should drive strong topline growth and margin expansion in 2024.
Ges will see positive show rotation of approximately $70 million in revenue and an anticipated full recovery of show sizes and corporate client marketing budgets.
Along with this higher level of revenue, we expect that Ges will reach its target of greater than 8% adjusted EBITDA margin in 2024.
Our actions to scale pursuit transform ges exhibitions cost structure and strengthened spyros capabilities are positioning us for strong growth in revenue and profitability. We remain committed to our strategy to create extraordinary experiences and strong returns for our shareholders I want to thank our hardworking and dedicated employees.
<unk> and our shareholders for your continued support and beyond and with that we'll open up the call for questions.
At this time I would like to remind everyone in order to ask a question Star then the number one on your telephone keypad.
Pause for just a moment to compile the question and answer roster.
Your first question comes from the line of Tyler <unk> from Oppenheimer. Your line is open.
Hey, good afternoon. Thanks for taking my questions here first one for me.
Thus far <unk> not seen any signs of a slowdown which is good.
How much visibility do you have into that into that business, especially for the rest of the year.
And what's your exposure to.
The tech sector.
What are some of your corporate clients within that sector, specifically, telling you.
Yes, it's a good question Tommy Thanks.
We have pretty good visibility into the spiral events, probably nine months to a year before they occur.
Okay.
They are usually calendars and they haven't been you've already picked out and they start working with us kind of in the 12% to nine month range before the event.
And so pretty good visibility into the back half of this year.
And your question specifically around.
Exposure to technology, we've done historically, we've done.
Several kind of user conferences for technology clients.
At this time, we continue to produce those and haven't seen any impact from.
Some of the headlines that <unk> seen across the news recently so.
From what we see.
Straightforward and we're ready and produces events.
Okay great.
And then I think one of the pleasant surprises.
What was the margin performance.
Can you just talk a little bit about that.
I know that obviously higher higher revenue contributor to that some of the changes that you've made.
Well, but just trying to get a good full understanding and <unk>.
<unk>.
While the margin was so much better.
You had originally guided previously.
I'll talk a little bit about the quarter both in terms of revenue.
And margin.
From a quarter perspective, obviously it came in stronger revenue wise than we had expected that's partially due to some new wins that we had within the quarter. But then also quite honestly just a much faster recovery of some of these events in the first quarter.
They didn't.
Some of the events didn't take place in 2022 because of the omicron variant.
And so.
They came back much stronger than we had expected.
Kind of speaks to the topline portion in terms of.
The margin.
As revenue comes through.
We're seeing very good flow through a lot of that is due to the ongoing cost structure efforts that we have.
Over the last several years, we've done a lot in terms of the cost structure, but.
We continue to find new opportunities to change the cost structure and so some of the things that we were working on last year towards the end of last year are starting to have an impact into <unk>.
End of the quarter. This year. So we're we're pretty excited about what we're seeing.
And.
That gives us good momentum as we're headed into the back half of the year.
Okay excellent switching gears to the pursuit side of things.
You gave some.
Youll pacing.
In terms of Banff Jasper just interested if you can give a little more detail kind of what youre seeing.
Bookings etcetera, when we start to look at them.
Summer season June July here.
Yes, thanks, Alex the pacing is strong and it's strong across the board. So in every in every geography.
Really from June onwards.
<unk> is performing very well so strong advanced strong in Jasper and then remember that Alaska in Montana, both had record years in 'twenty two and so my concern was perhaps would we see some.
Reduction of that because they were such strong years in 'twenty, two and we're seeing the opposite it's a heavy maintaining of the performance in those two geographies and so all in all it looks very very strong for the year.
Okay.
The last one for me the comment on reducing the Capex pursued some change in the timing of certain projects can you explain that a little bit more.
Yes, certain projects just through their entitlement process taking longer.
Variety of things, so it's nothing significant or dramatic it's more just timing and so again as we look it's beneficial to make those decisions early because been teams can focus on what they can execute if we're experiencing a delay with the regulatory authority and so on.
Okay, Great. That's all for me. Thank you.
Thank you.
Your next question comes from the line of Kartik Mehta from Northcoast Research. Your line is open.
Hey, good evening.
Thank you Steve just on the Ges business I think back to 91% pre COVID-19 levels and he said kind of international and small shows haven't come back. So if you look at just isolated to those two events Thats really.
Preventing you from getting to a 100 presented or the other.
Other things in the business that you see.
That might prevent you to get to that 100% pre COVID-19 levels.
Yes to be clear so from a.
From a revenue perspective, we are seeing things about 90% or a little bit greater than 90% of 2019 from a square footage perspective, we're only seeing about 80% of 2019 levels and so obviously the difference is the price increases that we've had over.
The last couple of years.
In terms of getting back to a 100% in terms of the square footage.
A lot of that will depend on smaller exhibitors and the international exhibiting companies coming back into the events that has been the largest component that has been missing over 2022 and even in the first quarter of this year. So those are the two pieces that need to come back in as they are.
Do come back obviously.
Our cost structure with more or less remain the same and so you'd have pretty strong flow through on that incremental revenue.
Okay.
If we were.
If you started seeing an impact from the economy, what part of the business gets hit first is it the traditional ges business or would you think would be the corporate events business.
Well first let me start by saying I don't see that happening.
From what I've seen.
The first quarter and what I have seen so far to where we are now.
I don't see any signs of that typically.
Both the corporate client and the exhibitors that would tend to trade show are making commitments for those events pretty far in advance.
So kartik what I would say is very similar to what we saw in 2008 2009, there was a lag between when.
The rest of the economy started seeing signals and when we actually saw any impact it was.
Anywhere from a six to nine months.
Delay just given the commitment that had already been made in advance.
Perfect and just one last one on pursuit, obviously, it sounds like Youre seeing very good demand.
For the summer season I'm wondering.
At least from our early booking standpoint, what youre seeing in terms of price improvement as far as room rates are concerned.
Yes, I mean, we're seeing solid increases and we have the ability to move price in a variety of categories, what's driving it is demand.
There is.
Other industries are concerned or maybe we're concerned with theyre going to be some sort of trade down where people were seeking less.
Less expensive pricing and so on we're seeing the opposite we're seeing super high demand for our higher end experiences and that demand continues so Dan we price really dynamically kartik. So we're moving price all the time, depending on the day of the week the week of the month and so on but.
We're quite focused on it and we expect to see strong performance as we go through for running 18% ahead on pacing for Banff and Jasper and then the other the other two geographies.
Sure and Alaska are.
Retaining their very strong demand from 'twenty two so we're in a good spot.
Perfect. Thank you very much I appreciate it.
Thanks, Greg.
Oh.
Your next question comes from the line of Bryan Mayer from B Riley Securities. Your line is open.
Great Good afternoon, and really quite a good quarter, we were very pleasantly surprised so good job there.
And maybe you could share with us the day of the week that we should be booking where we're going to get the better pricing that would be helpful. Also.
Ill reviews.
Yeah.
Moving onto questions visitation from Asia, and that is kind of a big topic last couple of conference calls.
As we sit here in early May.
Your view as to how robust that increase would be in 2023 changed at all since we last spoke on the earnings call.
When we last spoke we talked about demand for 'twenty, three and just remembering the China came out of the pandemic later and then all of a sudden and so one of the challenges is air lift from Asia to North America in the second challenge is getting an exit visa. So you can leave mainland China to go somewhere so as we mentioned in the previous call.
Our expectations are quite low for 'twenty three from that market because of the timing.
But what we're very encouraged with this the demand for 'twenty four 'twenty, five and 26% so like like the retail industry people are buying a season ahead and so our tour and travel partners across the world are blocking and contracting for space now in 'twenty four 'twenty $5 26, and we see the demand returning and they will return all at once it will be somewhat.
On air lift, but we see a progressive return over the two years really $24 95 and are quite encouraged with the demand that we're seeing.
Great and then moving on to fly over Chicago construction can you give us a little bit more granularity as to how thats going and is there an opening date or quarter at least and is there any update on Toronto.
I'll start with Chicago, So the construction is going terrific League.
We're going to be opening in March of 2024, and so we're on track for Grand opening and the teams really encouraged in Toronto, and we're working our way through the process of entitlements and approvals we.
We have good dialogue with the city of Toronto Assistant and patents fortunate timing on their part as we work our way through and then once we're through we will take a good look at everything and decide how we want to talk about timing and future and so on because again, we're still working our way through the process.
Okay and then.
Outside of those and I'm sure that those projects that you guys have in mind that you maybe haven't shared with the investment community yet, but is there anything going on that youre thinking about as it relates to the potential for economic weakness maybe in the back half of this year that could change your view on capital spend maybe late 'twenty.
'twenty three and certainly into 2024.
Okay, well ill jump in and answer that and tell me if I've missed anything but your first part of the question. We're always on the hunt for great new growth projects, but I can't really talk about those till they turn into something that's real and so where we are focused is we're going to double down on existing high performing and well instrumented businesses.
That could benefit either from additional capacity or from a refresh project and think of things adjacent to the core and the existing business that we have opportunity and a great example.
Our whole companies or variety of other things, where we have such demand that adding capacity is something thats very doable. There is theres not integration risk that businesses are well set up and well organized and so it's a very risk free way to do that and gives us a high degree of confidence in investment returns so heavy focus on refresh.
As we go forward.
<unk>.
What was the second part of your question.
If anything that's going on in the economy that would maybe pushed back or change your view on what you were thinking capital wise over the next 12 months to 18 months or are you. Just plowing ahead with what was already on your plate.
Yes, I think I think we're being focused.
The things that we can do and carefully but.
But we see no dense in the army, we see no slowing we see no lack of demand and we see the opposite Ellen I'm sure you've got something to add to that.
No.
Exactly what you said I mean, we aren't seeing anything Keating from plan right now on either side of the business.
Thanks.
<unk>.
But Brian .
If there are market changes down the road, we will adjust as we always do.
External forces that are happening on us, but I want to reiterate what what.
David and Alan just said, which is right now we don't see any signs of that but obviously, we will react if something happens.
Okay, and then just last from me from some of the.
Lodging companies that we cover that have big box group hotels, yes.
We're seeing increased spend as they get closer to the event. So Xyz company signed up for an event if their budget is y.
And within weeks or even maybe appetite any event. It goes to why plus 20% are you seeing at Ges people kind of upsizing their spend as you get closer to the event.
We are seeing Brian we are seeing that the spending habits are moving closer to the event meaning.
In the past.
People would make decisions further out we're seeing those decisions Medicaid made by the exhibitors closer into the event.
And we see some signs obviously of larger.
Events, we saw that through the last several quarters, where we've had pretty good revenue growth.
Versus 2019.
Okay. Thank you that's all for me.
Thank you.
Okay.
No further questions at this time, Steve Master I turn the call back over to you.
I appreciate it. Thank you so much and thanks, everybody for your time, we look forward to talking to you next quarter.
Thanks.
This concludes today's conference call you may now disconnect.
Thank you.
Yes.
Hmm.
Now disconnect.
Okay.
Yeah.