Q3 2023 Viad Corp Earnings Call
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After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question. Please press star followed by two thank.
Thank you.
Carrie long you May begin your conference good afternoon, and thank you for joining us for the <unk> 2023 third quarter earnings Conference call. We issued our earnings press release after the market close today, along with an earnings presentation, which are both available on our website at <unk> Dot com.
We will be referencing specific pages from the presentation during the call as we discuss our business performance and outlook I also want to point out that our earnings press release and presentation contain important disclosures regarding non-GAAP measures that will be referring to during the call, including adjusted EBITDA and income before other items.
During the call you'll be hearing from Steve Moster, our president and CEO and President of Ges Alan.
Ellen Ingersoll, our Chief Financial Officer, and David Barry President of pursuit.
Before turning the call over to Steve I want to remind everyone that certain statements made during the call which are not historical facts may constitute forward looking statements.
Information concerning business and other risk factors that could cause actual results to materially differ from those in the forward looking statements can be found in our annual quarterly and other current reports filed with the SEC.
And with that I'll turn the call over to Steve who will start on page four of our earnings presentation.
Thanks, Kerry and thanks to all of you for joining our call I'm very proud of our performance across the company during an important third quarter.
Both businesses posted strong results in line with our prior guidance ranges driven by excellent execution and increased demand for international leisure travel and live events.
For pursuit the third quarter is the biggest quarter of the year as leisure travel to our destination is at its peak during the summer months.
And the pursuit team is firing on all cylinders to deliver record levels of revenue and EBITDA with significant margin expansion.
This strong performance and the trends, we're seeing give us high confidence in our 2023 full year growth outlook and good reason to expect continued growth in 2024.
Yes, the third quarter typically represents a slowest quarter of the year for annually occurring events during.
During the quarter. The Ges team, we're sharply focused on cost management and delivering strong profitability from the events and projects that did take place while also preparing for a busier fourth quarter and keeping the pedal down on business development.
I'm really pleased with the team's execution and the continued growth we experienced in same show revenue and new additions to Spyros client roster, we have great momentum at Ges and a very bright outlook for 2024.
Now I'll ask Ellen to review, our financial performance and guidance followed by an update on pursuit from David and then I'll wrap up the call with additional Ges update.
Thanks, Steve.
As shown on page six net income attributable to the AD was $41 3 million for the quarter up approximately $3 2 million from the 2022 third quarter.
And our income before other items was $43 3 million essentially flat year over year, reflecting higher adjusted EBITDA offset by increased interest expense and income attributable to noncontrolling interests.
Our consolidated adjusted EBITDA was $86 3 million, which was approximately $4 3 million higher than the 2022 third quarter, primarily due to strong growth and margin performance at pursuit.
Consolidated adjusted EBITDA was approximately $3 million above the midpoint of our guidance range.
We delivered consolidated revenue of $365 9 million, which was approximately $11 million above the midpoint of our guidance range.
The anticipated year over year revenue decline was due to the timing of major non annual shows and the sale of our noncore audiovisual business, which had a combined $64 million impact on revenue.
Firstly offset by strong underlying growth.
As shown on page, 7% third quarter revenue grew 14% to reach a new high of $186 9 million.
This growth was primarily driven by increased international tourism in Western Canada in Iceland, as well as our investments to scale and elevate proceeds experiences through our refresh build buy growth strategy.
I should actually is ticket revenue of $71 $7 million grew 18% year over year on a 15% increase in visitors and 5% higher same store effective ticket price is.
Citation to our Canadian attractions was particularly strong during the quarter as international tours into Western Canada increased.
Lodging room revenue of $48 7 million and grew 15% year over year on a 10% increase in same store revpar driven by both higher ADR and occupancy.
Our Canadian hotels performed exceptionally well and with strong demand in the market. We benefited from the additional room capacity provided by the new 88 Gram Jasper Hotel that we opened in August of 2022.
Pursuits, adjusted EBITDA increased to $91 8 million, which is an improvement of $16 7 million year over year.
Year over year revenue flow through to adjusted EBITDA surpassed 70% and demonstrated the strong impact the incremental attraction visitation can have on profitability and margin expansion.
<unk> adjusted EBIT margin improved 330 basis points to 49, 1%.
As shown on page eight Ges delivered consolidated revenue of 179 million and adjusted EBITDA of negative $2 million during the third quarter.
Which were both at the high end of our guidance ranges for Ges.
As a reminder of the year over year comparisons for Ges as challenging in this quarter because of the timing of major non annual shows and the sale of armed services.
Excluding the $64 million revenue declined some dose factors Ges revenue increased about 16% year over year, reflecting strong underlying growth.
And we're pleased with the scaling of Ges's cost structure to deliver adjusted EBITDA that was nearly breakeven during this slower period of business activity.
Spiro delivered $58 $9 million in revenue and <unk> 8 million in adjusted EBITDA during the third quarter excluding.
Excluding the impact of major non annual shows and on services, which totaled about $19 million for Spiro.
<unk> posted revenue growth of about 8% over the prior year, reflecting strong spending from existing and new clients.
J S exhibitions delivered $122 $1 million in revenue and negative $2 8 million in adjusted EBITDA during the third quarter.
Excluding the impact of major non annual shows and on services, which totaled about $45 million for Ges exhibitions GDS.
<unk> divisions posted revenue growth of about 19% over the prior year with same show revenue growth of 14% from U S exhibitions.
Now turning to our fourth quarter and full year guidance, which is outlined on page nine.
Based on our strong third quarter performance and our expectations for the fourth quarter. We are pleased to be increasing the bottom end of our full year adjusted EBITDA guidance ranges.
For pursuit, we have raised the low end of the range by $6 million, making the new full year range $91 million to $95 million.
For Ges, we have raised the low end of the range by $4 million, making the new full year range $58 million to $62 million.
We now expect full year consolidated adjusted EBIT EBITDA to be in the range of $135 million to $143 million as compared to 2022, adjusted EBITDA of $116 1 million.
For the fourth quarter, we expect consolidated adjusted EBITDA to be in the range of $2 million to $10 million as compared to negative 2 million in the 2022 fourth quarter, reflecting improved results at both pursuit and Ges.
For pursuit, a seasonally slow fourth quarter, we expect adjusted EBITDA to be in the range of negative 10 to negative $6 million as compared to negative $11 3 million in the 2022 fourth quarter, primarily reflecting anticipated revenue growth.
For Ges, we expect fourth quarter adjusted EBITDA to be in the range of $16 million to $20 million versus $12 7 million in the 2022 fourth quarter, primarily reflecting anticipated revenue growth.
Next I'll cover some balance sheet and cash flow items. We ended the third quarter with total liquidity of $201 3 million comprising $106 3 million in cash and approximately $95 million of capacity available on our revolving credit facility.
This high level of liquidity reflects the seasonally strong EBITDA and cash flows from pursuit during the third quarter.
Our consolidated cash flow from operations during the quarter was an inflow of approximately $78 million.
And our capital expenditures totaled about $23 million, including approximately $13 million of growth Capex at pursuit.
At the end of the third quarter, our debt totaled $477 6 million, including $392 million on our term loan b.
Financing lease obligations of approximately $64 million and other debt of approximately $22 million.
On October six we prepaid $70 million of the term loan b in connection with an amendment to our credit facility that also upsized, our 100 million revolver to $170 million of total capacity. This action has a number of immediate benefits for us first it.
<unk>, a lower cost source of debt with a credit spread that is currently 200 basis points lower than the spread on our term loan b.
Additionally, it gives us flexibility to increase and decrease borrowing based on a seasonal nature of our cash flows enabling us to run at an overall lower level of debt as compared to carrying term debt.
During the fourth quarter, we are expecting an operating cash outflow of approximately 37% to $27 million.
And capital expenditures of approximately $20 million to $25 million, including growth capex of about $10 million.
This puts our full year expectation of operating cash flow at approximately $80 million to $90 million in full year capital expenditures at approximately $75 million to $80 million, which includes growth capex of about $40 million, primarily for fly over Chicago and refresh projects at Pyramid Lake Lodge in Jasper.
Looking ahead to 2024 with a meaningful <unk> growth. We are anticipating we expect very strong operating cash flow, particularly in the third quarter with pursuit seasonal contribution and ges as the major non annual shows taking place.
This should present us with an opportunity to reduce our level of debt, while still selectively investing in growth at pursuit to maximize long term value for shareholders through our refresh build buy growth strategy.
Now, David and Steve will provide further insight into our business performance and the exciting growth coming our way at pursuit and Ges David over to you.
Thanks Alan.
In our pursuit starting on page 11.
At pursuit of our mission is to connect guests and staff to iconic places through unforgettable inspiring experiences and I'm incredibly proud of our team's unwavering focus to support our mission throughout the peak summer season, and deliver incredible third quarter results across three countries 13 World class attractions 27 distinctive hotel.
50, restaurants, and bars, five transportation products and 48 retail outlets.
So starting first with attractions pursuits attractions are strong economic engine for the business our year to date ticket revenue grew approximately 23% to $123 million and this was primarily driven by increased visitation, which was up about 20% year over year.
Our Canadian attractions were particularly strong as we are seeing increased international tourism into Canada.
While the group volume has not fully recovered yet we're seeing some offsets from strong demand from independent travelers.
This year, we launched the pursuit pass to help maximize visitation from independent travelers by locking in advance nonrefundable commitments.
<unk> includes multiple high quality attractions from our Banff, Jasper collection, and one product with a compelling value proposition.
Sales of the pursuit passed exceeded our expectations for the year with more than a 114000 passes sold equating to over $11 million of ticket revenue.
I'm also very pleased with the performance of our newer experiences that have launched in recent years Sky Lagoon flyover Las Vegas, and the Golden Skybridge, all posted significant visitation increases over the prior year from stronger demand.
So next on page 12, our one of a kind hotels and lodges has delivered 12% year over year room revenue growth driven by increases in both ADR and occupancy and we're fortunate to operate in markets with limited capacity and high levels of demand.
Similarly during the peak summer season.
These market dynamics, along with the quality of our experiences enable us to deliver strong revpar performance.
For the year to date, our same store Revpar was up 10% from 2022.
All of our geographies delivered growth in room revenue with Western Canada, again standing out from a year over year growth perspective.
And we're thrilled with the Forest Park Alpine hotel that we opened in August of last year. This new property is allowing us to capitalize on the strong demand we're seeing in the capacity constrained Jasper market.
On page 13, you can see our overall revenue growth trajectory.
On a year to date basis, we're up about 16% and set a new record $308 million in revenue.
We're super happy with the performance of our attractions and hotels and equally impressed with the $9 million of revenue growth, we've delivered from our integrated food and beverage and retail outlets. This year.
With such strong year to date performance, we have a high level of confidence that we'll be able to deliver full year revenue growth of about 15% in 2023.
So across our collection of iconic unforgettable and inspiring experiences we're benefiting from increased international visitation continued ramping of our newer experiences strong guest demand and pricing power.
The solid leisure travel trends with the shift in consumer discretionary spend spend two experiences over good positions pursuit for continued growth.
Alright. So next lets look at page 14, and discuss our adjusted EBITDA margin expansion, which is primarily driven by increased visitation at our high margin attractions.
Our attractions are built for volume, meaning that profitability increased significantly when guest visitation is strong.
Revenue from every incremental guest flows through at a high rate to our bottom line.
With guests now able to enter in Western Canada in Iceland without restrictions.
The increased visitation is driving material year over year increases in our adjusted EBITDA margin.
Additionally, staffing pressures have eased and we ratcheted back the extraordinary measures put in place in the prior year to address pandemic related labor challenges.
For the year to date, our adjusted EBITDA margin improved by nearly 300 basis points as compared to 2022.
So with the expectation that distraction visitation will continue to grow along with diligent and careful focus on labor and expense management, we are well on our way to achieve our 2024 target adjusted EBITDA margin of 30%.
Pursuit is on an exciting growth journey fueled by our refresh build buy strategy, which is highlighted on page 15.
By strategically investing in attraction in lodging experiences with high margins and strong returns we're on trajectory to more than triple pursuits. Adjusted EBITDA by the end of 2024 relative to the $36 million. We delivered when we started on this path in 2015.
We operate in some of the most remarkable locations in the world with substantial barriers to entry and perennial guest demand.
This gives us a strong foundation for enduring success.
In addition to our remarkable assets our success is deeply rooted in our hospitality philosophy, which starts first and foremost with team member satisfaction and engagement, which leads to enhanced guest satisfaction and loyalty.
While driving strong profitability and growth.
Alright, connick experiences combined with our hospitality profit chain is a winning formula that differentiates the guest experience strengthens our competitive advantage and fuels meaningful growth.
So just I finished my remarks, I just want to say thank you to the many team members across pursuit for making the magic happen Steve back to you.
Thanks, David now I'd like to provide some insight into the drivers of the Ges business, which includes both ges exhibitions and Spyros.
Let's start on page 17, and talk about GTS exhibitions are global leading contractor for exhibition Organisers.
Exhibitions are viewed as a valuable investment for businesses that provide a powerful means to drive sales growth over the past 18 months. The exhibition industry has experienced a significant recovery when.
When we look at the two main drivers of revenue growth for Ges exhibitions pricing and event size we.
We see substantial improvement in both metrics.
On a same show basis.
Yes exhibitions U S. Same show revenue is now exceeding 2019 levels.
And we've seen solid but not full recovery of show sizes.
This means that individuals show pricing has increased faster than the growth of the event size.
This also illustrates the incredible future growth opportunity for GTS exhibition as trade shows and conferences continue to grow back to 2019 levels.
Now, let's talk about Spiro, our global experiential marketing agency on page 18.
Corporate clients view experiential marketing as an important part of the marketing budget and a powerful channel to connect with their customers.
This is a large and fragmented market that is forecasted to grow significantly and spyros is well positioned to win as one of the few end to end global experiential marketing agencies servicing a great client roster of fortune 1000 corporate clients.
Aspire has developed points of differentiations like its global service network forward thinking strategy and creative and last mile execution, better driving topline revenue growth from expanded services with existing clients and winning new clients.
Since we rebranded and launch spiral early last year. We've won 49, new clients. We believe in the long term topline growth opportunities at Spiro and have built the foundation to deliver a much larger future revenue base.
On page 19, you can see Ges's overall revenue growth trajectory.
Since early 2022, Ges has experienced improving industry dynamics and steady underlying growth participation.
Participation at trade shows and conferences continues to improve each quarter and the demand for <unk> services is approaching 2019 levels, notably U S exhibitions year to date same show revenue grew about 21% and event sizes increase about 11% compared to the prior year.
At the same time corporate marketing budgets are exceeding 2019 levels at corporate marketers are finding new ways to engage with their target audiences through experiential marketing and we continue to gain share in this market and expand our marquee client base.
Ges exhibitions and <unk> are positioned for continued growth with these favorable trends.
For the full year, we expect Ges's revenue to grow mid single digits versus 2022 and more than offset the anticipated revenue declines from the timing of major non annual shows and the sale of on services, which will impact year over year revenue by approximately $80 million.
Excluding the impact of these factors ges's full year underlying revenue growth is expected to be about 16%.
Looking ahead to next year Ges will benefit from about $70 million of incremental revenue from the timing of our major non annual shows, including <unk> and mine Expo and the 2020 for third quarter.
These large events combined with our outlook for continued industry growth and new client wins that Spyros will provide a strong lift to EBITDA and free cash flow.
Now, let's take a look at page 20, and discuss our adjusted EBITDA margin expansion.
In addition to topline revenue growth, we're focused on Ges's adjusted EBITDA margin expansion and are on track to achieve our target of greater than 8% by 2024.
Historically ges's adjusted EBIT margin has fluctuated between 5% and 7% with higher margin driven in years with strong incremental revenue per major non annual shows.
Over the past three years Ges has transformed the business's cost structure and eliminated approximately $50 million in SG&A through lean productivity initiatives.
Ges's transformation has not stopped and we continue to focus on identifying additional efficiency gain today ges as a robust multi year roadmap of lean initiatives, which will enhance our margin each year.
With a leaner lower cost structure, ges should experienced 20% or greater flow through of incremental revenue to EBITDA next year.
As revenue growth from increasing event sizes, and winning new clients, we expect ges's adjusted EBITDA margin will exceed 8%.
We're encouraged by the strong momentum in Ges's live events and experiential marketing this year and we're excited about our growth prospects for next year, we remain committed to driving meaningful free cash flow through ongoing lean initiatives at G S exhibitions and profitable growth at Spiro.
In closing, we are thrilled with our performance across the yard and the strength, we're seeing in our businesses this year as well as the bright future ahead.
Main committed to our strategy to create extraordinary experiences and strong returns for our shareholders.
I want to thank our hardworking and dedicated employees 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. Please press Star then the number one on your telephone keypad, we'll pause for just a moment to compile the Q&A roster.
The first question today comes from the line of Brian <unk> from B Riley. Please go ahead, Brian Your line is now open.
Thank you and good afternoon, Steve and Alan and Dave.
Couple of questions for me.
Some a little bit more granular, maybe starting with Goldman skybridge.
When we toured that property this summer and thank you for that.
There was a significant amount of to.
<unk> developed land at that location.
What are you thinking about in the way of timeline and cost to eventually develop that site out further.
Yeah.
Yes early days for us as we work through it I'm looking at a variety of different opportunities Brian there one is <unk>.
Bridges are very popular so there's opportunities to expand bridges.
Travel over the canyon in various locations.
Obviously theres some other things within the operation, we would focus on as well. So we're in the Master planning phase as we look at it and we will have news as we develop new and interesting improvements to the site. We've had a terrific season really pleased with the visitation.
And that leads to kind of my second question.
Were you able to benefit at all in Western Canada. This year from an extended season at all due to better than expected, whether or how does that play out.
It was a beautiful fall September was terrific October was terrific.
So we are enjoying some beautiful weather, but I would say, it's just been continued visitation, we had a very strong third quarter and that continued right till the very end.
And I know the individuals visitation has been strong to that market. The group is not quite got back to where you think it can be from international inbound when you look out to 2024, how much can visitation do you think grow there.
In broad strokes is it 5%, 10%, 20% I mean, what's the thought process.
Yes, it's really early days and I'm loathe to give a prediction on the traction visitation considers great chances Avi slightly wrong, but we're encouraged by the demand that we're seeing and I'll start first with our tour and travel partners around the world. There is strong demand for contracting into all of our various locations not just western Canada.
With Asia travel it's recovery the recovery has begun its not as robust on the group side as we would like it to be but it's improving.
A flight from from Asia into Western Canada in the Western United States are improving as well. So we anticipate continued visitation growth and we also have white space at certain times of the year, where were working to expand and fill that white space with.
With guest they can visit at that particular time of year.
Okay.
<unk> market is more price sensitive we have opportunities in early season that are tremendously attractive and obviously less expensive than peak. So it's not only filling in the peak season, but its filling in the white space in there.
Valleys that we see throughout the year.
Okay, and maybe just lastly for me and shifting over to Ges for Steve.
Your comments on the margins EBITDA margins are quite welcome five to seven growing to eight next year hopefully in 2024.
I suspect, though that you wouldn't want to stop there per say and as we model out 25% in 2006 numbers.
How can that grow from the 8% is it kind of just lock step up it goes to eight in the quarter eight and a half or is it more meaningful eight goes to nine goes to 10.
Yes, that's a good question Ryan.
The way, we're looking at it we have.
A fair amount of room ahead of us in terms of margin improvement based on a lot of lean initiatives that we have.
Have in place and are putting in place for future years.
I would see it more as a step function.
Type of change over time, we're very excited about 2024, and hitting that greater than 8% target that we put out there.
Think theres more room ahead for us and it's really going to come from us continuing to improve.
Efficiency.
Also going to come from as the events continue to grow remember the square footage is still less than what it was in 2019 as that comes back that will have a significantly high flow through.
And then lastly, we will continue to win new clients inspire ROE and that usually comes with a pretty healthy margins as well so across those three fronts. We're really optimistic about 24, and then even more optimistic as we look forward into 'twenty five 'twenty six.
Okay. Thank you that's all for me.
Thanks, Brian.
Thank you.
The next question today comes from the line of Tyler Battery.
Please go ahead. Your line is now open.
Thank you good afternoon, Steve just a follow up kind of on that last line of questioning with respect to the Ges, It's nice to see the growth in that business with respect to the same show U S same show.
I mean, you talked about the square footage.
Being down quite a bit with 2019.
So do you think you can close the gap on that next year, what sort of factors need to happen for that to get back to where it was.
Yes.
We're going to certainly close some of that gap and 24, but I don't think we will close it entirely there are still some sectors that.
Haven't fully recovered and are substantially lower than the average of where we are.
But I do think we will make meaningful progress in 'twenty, four and 25 and I would expect to close at the end of 'twenty five.
So we see that as a really strong opportunity both in terms of revenue, but more importantly in terms of profitability.
As those events continue to grow our underlying cost structure doesn't change dramatically there as kind of incremental union costs and labor associated with it but it should have very strong flow through as it shows our continued to grow. So that's what we're looking for in 'twenty four and again I think it's more in.
In one year.
Recovery.
Okay.
And then quickly just in terms of the spiral.
And the.
The growth there, 8% year over year, when you make some of those when you make some of those adjustments I mean, I know you guys have made a number of investments in that business are those starting to bear fruit a little bit sore.
Maybe next year, perhaps.
When you really start to see those even have a bigger impact to the revenue line.
Yes, we put in.
Made some investments in early 2023 into kind of middle of the year of 23, those investments are going to start paying off here in the tail end of 'twenty four and into 2024.
So we expect significant growth going into 2004.
You see a little bit of it showing up in the fourth quarter of this year.
Okay, and then switching gears to pursuit.
Interested.
Visitation and.
Business trends at the new experiences in the portfolio.
Or is there a saar was up 13% year over year.
How are those attractions progressing against your expectations I mean, if we kind of hit.
<unk> so to speak is there even more upside and when you look at those new experiences and potential growth from here I mean is it a little bit more visitation is it more pricing is it more margin improvement I would imagine it's maybe all three but just trying to get a sense of where we go from here.
Sure.
Some of those newer newer experiences.
Tyler you did indeed imagine correctly it is all three and.
If you look at where we are sky lagoon up 27%.
Flyover Las Vegas, so far this year excited about where we are at 35 Golden Skybridge up 37, so it's exciting to see in the quarter, we see ample room for continued growth and we also see continued opportunity and white space periods of the year, we see ample opportunity.
At different times of the season, and so different times of the day. So we're going to continue in and part of that all drives what you see on page 14, which is our margin expansion and it connects into just our performance Thats attractions performed better.
Those dollars go straight to the bottom line so.
Really price refresh build buy.
That's what drives the business.
Okay, Great and then just as a follow up and I know this topic has come up.
Quite a bit with respect to the margin after huge and the year over year growth. There was really very strong, but you're still quite a bit away from where you were in 2019 is it as simple as.
Clothing.
The same store visitation gap and getting more groups.
And that maybe you should get you back to that to that mid fifties, where you were in the years.
Covid or.
Maybe just the cost inflation and some shifts in the business mix, perhaps make that.
On the cable.
Yes, I'll speak to it for the year round basis, because I think when you look at the quarters, there's some variation per quarter, but when we look at year round margin performance, we have clear sight and confidence to 30% EBITDA margin in 2024, and we're not going to stop there we're going to continue to build our ultimate goal is to get <unk>.
Back to 33% EBITDA margin and be able to hold that position forever. So.
It's a combination of things prudently managing our costs and working hard on our supply chain. It's also seeing the return of attraction visitation, it's managing labor well and continuing to manage revenue dynamically and that gets us back to our historical levels or just slightly below.
But I think again, a very positive position at 33% over the long term.
Okay perfect.
For me just broadly strategic Pete Watson.
Awesome.
I've asked the best but from an acquisition perspective.
In certain areas within leisure travel hospitality it seems like there's some opportunities coming up with respect to.
Refinancings and whatnot, maybe some for sellers.
Any sort of interesting tidbits in terms of the landscape that you're seeing out there.
Would you like to.
Perhaps to grow externally on the pursuit side of things, we're looking at acquisitions right. Now I mean, do you have a pipeline or maybe a little more focused on kind of operations.
Refining and investing in.
And the assets that you have right now.
Yeah, Tyler we're our strategy remains the same which is we're very focused on our refresh build buy we have a lot of opportunities within our current portfolio at pursuit.
We do have a healthy pipeline of opportunities from an M&A perspective.
I think the environment.
Has changed I mean, the cost of capital.
Is higher than it was pre.
For years, and so the hurdle rate for us to invest money has obviously increased but we still see good opportunities both inside our portfolio from a refresh or from a build perspective, and we see some externally from a buy perspective so.
We continue to look at things, but there is a higher bar than what we've seen.
18 months two years ago.
Okay. That's all for me thank you.
Thanks Tyler.
The next question today comes from the line of Alex Fuhrman Craig Hallum. Please go ahead. Your line is now open.
Sure.
Hey, guys. Thanks, very much for taking my questions and.
Congratulations on on everyone on the strong performance of both segments of the business David I wanted to ask about the pursuit pass.
It sounds like Thats been.
Something something of a home run this year can you tell us which attractions have really been driving the purchase of it has it been more your tried and true attractions like the Banff gondola or is it maybe more people go into the newer attractions.
Like like the Sky bridge and buying it there and then curious how people are using it are they using the path at the more popular attractions like the way people would spend just their own cash and generally speaking are people, taking advantage of it and getting their money's worth.
Curious what the behavior around that that path has been.
Yes, I think it's exciting what's interesting with it is bill.
<unk> as.
As people are buying the pass and using it they are really drawn to the flexibility that the product provides the ability to visit all of our attractions over a period of time and that might be a seven day stay within the vast Jasper collection or someone that's purchased wanted on a regional basis and they're continuing to do day trips to various locations we have.
Had good utilization in each of the attractions and that's just been very encouraging and what it's done I think is also introduce people to some of the newer attractions because it's included in their path. So if perhaps they had considered.
All the way from Calgary to Jasper two experienced only Mike yes, they're excited to do it in the Golden Skybridge as well. So we're quite pleased with the program we are encouraged.
We already are launching for holiday sales. So that you can buy your pursuit paths for your family for next year, if you'd like to before the Christmas holiday and we're quite encouraged by the program and the participation.
Okay.
That's terrific.
Thanks for that David and then I'm curious it looks like right now that's just for your attractions in the Canadian Rockies I'm curious if you would look to either doing a similar path.
And some of your other geographies in Montana, or Alaska, or even even just maybe including some of those geographies in the in the pursuit path and trying to get people to make additional trips.
It is something we're taking a really good look at and we wanted to test it on.
Fairly major scale to see first demand for the product and you watch the utilization patterns, but I think it's a good comparison to some of the other industries that have had seen real increases in visitation and a participation rates as people plan destination trips around where they have access to attractions. So we're excited about the potential for it into the future and where.
Looking hard on.
Moving it forward in the right way.
That's great. Thanks, very much for that and then just my last question here.
It looks like last year, you guys had some pretty nice.
Success with night time winter programming at the Banff gondola.
Given that you operate that asset all year round and it doesn't really generate a whole lot for you for half of the year, how big of an opportunity can that be and should we expect to see.
More and more activity at the gondola this winter than last.
Yes, I think given where consumer trends are given that we've seen no.
Decrease in spend or participation, we've actually seen the opposite and that our overall revenue per visitor protraction visit. This increase we anticipate that's going to continue the Banff gondola is popular on a 12 month basis as people enjoy the experience so knight rises becoming more well known.
And also the Canadian dollar's positioned very favorably for incoming visitation from the U S into Canada and other international markets.
They've got some early snow so it's an exciting part and start to the ski season, and I think that we will see some increased visitation time will tell them, we're working hard on making that happen.
Terrific, Thanks, very much David.
Thank you.
As a reminder, if you would like to ask a question. Please press star followed by one on your telephone keypad.
The next question today comes from the line of Kartik Mehta from Northcoast Research. Please go ahead. Your line is now open.
Thanks.
Steve I was just wondering I think you've answered this question by talking about what Youre seeing in terms of spend but I'm wondering when you talked to customers any concern about what's happening in the economy uncertainty flowing into.
Their plans for how they want to exhibit or the amount of space they want to take anything that.
Give you pause or maybe encouragement.
From your conversations with your customers.
Yes, great question Kartik.
We continue to see strength in both the exhibition space and in the experiential marketing space with Spyros.
Both of them have continued to increase.
Over the course of 2023.
You can see on one of the slides, where we indicated kind of what's happening from a revenue and a square footage perspective within the exhibition space. It has increased sequentially each quarter.
And we're thrilled with that performance so.
As I look forward and I speak to some of our clients out of events coming up in the fourth quarter as well as into 2024 that strength continues to be there from what I'm hearing from our customers.
Both sides and so.
So for me, it's a very positive outlook.
And.
No signs of any.
Impact from broader economic issues.
And then just a big picture question Steve.
Steve you know before the pandemic there was always concerned that we would move away from face to face and going to go to a virtual or at least a big portion might.
And I'm wondering now that the pandemic has happened people have not had face to face and now back to face to face.
That debate ending.
So are you having any conversations with customers.
I think that maybe the virtual comes back or that's a good option.
Rather than the face to face.
Kartik I think theres been multiple times through history, where.
People have challenged either through technology or other means.
Need for face to face meetings and consistently that human interaction for face to face meetings continues to prevail.
There are certainly areas where technology can.
Complement or supplement our face to face engagement.
But it does not surpass and it doesn't replace the need for human interaction and so.
The strength of the industry is very strong it rebounded very quickly as soon as meetings, we're able to be held in person.
And.
I see that continuing going forward, there will be opportunities where technology will.
Add new features and new elements to an event.
But I see strength and exhibitions conferences and experiential marketing in general.
Perfect and then just one last question on pursuit I think Revpar for same store is up 14% compared to 19 I'm, assuming that's a mixture of price in the types of rooms are selling a is that accurate and then b.
It seemed like there was a lot of demand for high end experiences as we came out of Covid and I'm wondering if you anticipate that similar demand as we go into 2024.
Yes, all indicators are that the demand is going to continue.
A couple of things driving Revpar growth one is refreshing properties as you make experiences better you've got an opportunity to charge more for those experiences and guests are willing to support that because the experience just fundamentally got better.
So we're encouraged by that we're encouraged by demand and.
The overall performance of the lodging business has.
It has improved and we see that continuing to improve.
Perfect. Thank you very much I appreciate it.
Thanks Kartik.
There are no further questions at this time, Steve Moster, I turn the call back over to you.
Thanks, Kelly and thanks, everyone for joining us today, we look forward to giving you another another update at the end of the quarter. Thanks, So much.
This concludes today's conference call you may now disconnect your lines.
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